The Nineteenth Century UK Bicycle/Infant Motor Industry Investment ‘Bubbles’

by John Batten

Until 1896 motor vehicles were almost unheard of, with four mph speed restrictions remaining from the age of steam traction engines. However, H. J. Lawson’s invention of the ‘Safety’ bicycle in 1879 (a progression from the ‘high wheeler’) inspired the population and promoters of the UK cycle industry. The 1880s saw technical and structural improvements by manufacturers perfecting the safety bicycle, as reflected in the high prices bicycles could command. For example all new bicycles were fitted with pneumatic tyres by 1893/4.

In April 1893 ‘The illustrated and Dramatic News’ wrote under the heading ‘The Portsmouth Road’ that there were 500,000 cyclists in the UK – 10,000 of whom were in the precincts of Greater London (this would have included all types of second hand machines.)

The Cycle Trader’s 40th anniversary issue in 1935 contained contributions by traders who were active the 1895 period. UK bicycle exports during 1894 surprisingly amounted to ₤306,606 to France, Belgium ₤167,351, Holland and Germany about ₤100,000, and to the USA about ₤70,000, but with no mention of exports to Great Britain’s Commonwealth Countries! According to one cycle trader (retailer) in 1895 ‘The sale of new bicycles for cash was surprisingly low at around 30%, generally to people who had the “keep the change” outlook on life. Most business was done with the bicycle hire (rental) trade at ₤1 per week. Some traders hired at 1/- (5p) per hour and also taught people to ride.’

Harry John Lawson, a mechanical engineering student who graduated into the UK bicycle industry, invented the ‘Bicylette’ ‘Safety Bicycle’ 1879, and in 1880 patented his ’vision’ of an obscurely powered ‘vehicle’ with bridle steering. Even at this early stage he visualized that the bicycle would transition to the motor vehicle. Lawson was in management at the Tangent Works. In 1881 three private bicycle businesses amalgamated, Tangent and Haynes & Jefferies with Rudge. The amalgamated businesses were headed by George Woodcock, a solicitor who had recently purchased the bicycle business from the widow of owner Dan Rudge, already a reputable bicycle manufacturer. The amalgamation was named Rudge & Co. H J Lawson was appointed ‘Sales Superintendant’ according to the Rudge Cycle Co Ltd prospectus of October 1887 (original share cert not seen). The value of cycles invoiced rose from £5,185 in 1881 to £41,163 in 1885. Lawson continued his services to the company. Rudge & Co manufactured Lawson’s Bicyclette which was selected by the War Office for military use. Rudge & Co held a particularly valuable ball bearing patent. While with Rudge, Lawson would have learned the value to a company of holding and leasing out patents, influencing him to apply his knowledge to the potential of the fledgling motor industry. Rudge Cycle Co Ltd merged with The Whitworth Cycle Company Ltd in 1894.

Lawson next appears in March 1895 when he acquired the Beesten Pneumatic Tyre Co to take over the English patents and business of a company of the same name. In November 1895 Lawson floated The British Motor Syndicate, purchasing any motor related patents available. He bought the Daimler Syndicate, his most successful venture, and in May 1896 he floated the Great Horseless Carriage Co Ltd (ill.) which used Daimler motors. However, within two years shareholders were unhappy they had not received dividends.

Lawson then set up The Motor Manufacturing Co in 1898 offering Horseless Carriage Shareholders six Motor Manufacturing Co shares for every £10 share of The Great Horseless Carriage Co Ltd. The Motor Manufacturing Co was reorganized in 1900 but had gone by 1901. In August 1896 at Beesten, Coventry, Lawson acquired Barton & Loudon Ltd cycle rim manufacturers to create Beesten Tyre and Rim Co Preferred share certificate in the New Coventry Cross Cycle Co Ltd. This was a reconstruction in March 1900 of the Coventry Cross Cycle Co (first registered 1896) to take over the business of Warman and Hazlewood (established1875). One of the most decorative UK bicycle company share certificates. The new issue failed to attract sufficient investors. An ordinary certificate in brown also exists. 19 | www.spink.com investment ‘bubbles’ Ltd. (ill.). According to the articles of association, the company was ’to purchase a certain patent from Mr. Lawson, a license was also obtained for the manufacture of Rims for pneumatic tyres in connection with Motor Carriages.’ Again at Beesten he floated the Quinton Cycle Co which became the Beesten Cycle Co Ltd in 1896. Late 1897 it was decided to subdivide the business into two companies Beesten Cycle Co Ltd and Beesten Motor Co Ltd, the latter to produce the Beesten Quad Motor Cycle (the only motorcycle to complete Lawson’s Emancipation Rally to Brighton in 1896). His only signature on a share certificate is a facsimile. None of his companies survived.

While Lawson pursued the fledgling motor industry Ernest Terah Hooley, an experienced property dealer, also saw bicycle businesses to be an opportunity to make his fortune. He moved operations to London with a six digit bank loan. He entered into a verbal partnership with M D Rucker, a man very familiar with the cycle industry. Rucker was manager of Humber Cycle Co and must have received a fortune from Hooley’s business. Hooley quickly became a sought after financier, a friend of the great and good, and who paid out thousands of pounds for eminent ‘names’ to front some of his floatations. It appears that almost everyone involved in the floatations did very well out of his largesse. Emboldened by the enthusiasm of investors he claimed to have made £360,000 by restructuring the Humber Cycle Co Ltd in November 1895 (the company was first registered 1887 but none of these share certificates have been seen). He successfully acquired bicycle companies and then sold them to the public at incredible profits in the belief that he would make more money than shareholders. Hooley’s country estates and wealth are believed to have grown to near £7,000,000. By the peak of the bicycle boom in 1896/7 he had become overwhelmed, a victim of his own success complicated by poor accounting. To his credit he had increased his estate workers’ wages from 12/6p to £I per week, irritating the other Cambridge shire farmers.

Here is an example extract from a floatation of two private bicycle businesses near to the end of the UK bicycle boom in May 1897.

Cycle Shares as a Profitable Investment: ‘Cross’ and ‘Mathews’ Limited. It can be safely said that the shares in Cycle industrial businesses form the most profitable form of business now known. From small beginnings great numbers of businesses have grown to such gigantic proportions that they have been able to deliver dividends to their shareholders of phenomenal character… Guaranteed Profits– The vendors have guaranteed interest upon debentures and dividends 7% and 15% respectively for the first year. The required ₤50,000 payable ₤20, 000 cash, balance cash or shares and debentures at the option of the directors thus leaving ₤20,000 working capital’.

By October 1897 only ₤4,000 in shares had been issued and the purchase money had not been paid. Liquidation followed in 1898.

In 1896 speed limits increased to 14 mph with the coming of the age of the motorcar. The craze for cycling slumped especially for people of ‘keep the change’ abilities. Litigations for £1.5 million hit Hooley followed by bankruptcy in June 1898. However he claimed to have received in the region of £100,000 from insurers on a strange life insurance policy arrangement with a solicitor. Hooley paid the premiums on the said ‘alcohol related’ life of Adolph Drucker MP. From 1898 to the end of the century many public limited bicycle companies went bust, share prices plummeted and investors losses collectively would have been considerable. The few surviving companies were in the main those with overseas export markets or those that had moved production to infant motor cars / motorcycles. It took until around 1908 before the UK bicycle industry made a meaningful recovery.

E T Hooley’s greatest success had been the floatation of the Dunlop Tyre Co Ltd in May 1896. The privately owned business of ‘The Pneumatic Tyre Company’ was offered to Hooley by owner William Harvey Du Cros for £3,000,000 in recognition of John Boyd Dunlop’s invention (or re-invention) of an inflatable tyre. Dunlop was the name chosen for the company and it was decided to float at £5,000,000. Advertised profusely, the venture was apparently extensively oversubscribed.

In 1904 E T Hooley and H J Lawson (said to be an acquaintance by Hooley from the ‘Cycle Craze’) were arrested and charged with fraud involving investments of another. Lawson was jailed, ending his business career. Hooley was damaged once more and did not recover, later serving two jail sentences for fraud. He wrote his book of Confessions in 1924 while serving the second term. Although some of Hooleys promotions are known it has not been possible to establish all or how many of the numerous UK bicycle related companies were promoted by Hooley or if he operated under a business name. He successfully promoted the Bovril and Schweppes Companies.