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Note: This is an abridged version of a chapter in British Commerce and Industry 1934
IF an institution is correctly defined by Emerson as the lengthened shadow of a man, the business of Waterlows may truly be said to result from the cumulative influence of a family. Founded one hundred and twenty-three years ago in small premises in the City of London by James Waterlow, it has been built up by succeeding generations of his family, until to-day it is one of the greatest organizations of its kind in the world.
James Waterlow commenced life as a law writer, and adopted the idea of employing lithography and printing as a substitute for copying where a large number of copies of legal documents were required, thus effecting a saving of both time and expense. This was the beginning of this world-famous printing firm; it is also the explanation of the enormous amount of work which Waterlows have always done for the legal profession.
The business thus modestly begun grew steadily in importance. Five sons of the founder were taken into partnership, and Carpenters' Hall was acquired to give additional space for increasing work. The fortunes of the firm ran with the tide of the great Industrial Revolution which had set in. The development of the railway system, the rapid growth of banking, shipping and insurance, all brought new work to Waterlows.
On the death of the founder in 1876, the business was converted into a limited liability company. Meanwhile, one of the four sons — Sydney — had devoted himself to civic and national affairs. He became Lord Mayor of London in 1872, was created a Baronet, and was a Member of Parliament.
In 1877 it was decided to make a division of the business, and two of the sons, with other members of the family and Mr. A. T. Layton, established the firm of Waterlow Brothers and Layton, while Sir Sydney and his sons, together with his brother Walter and some of their most experienced colleagues, continued as Waterlow and Sons. These two firms continued their separate existence for many years, the former specializing on the legal and country side of the business, and the latter on the railway work, town and export trade. Sir Sydney Waterlow, Bt., was managing director of Waterlow and Sons Limited, and on his death in 1906 he was succeeded in the baronetcy by his son Philip, who had already been in the business for over forty years, and was made first chairman in 1877.
When Sir Philip retired in 1923 he had enjoyed sixty years of active life in the business.
In 1920 these two great organizations were reunited. Sir William Waterlow, K.B.E., who had been managing director of Waterlow Brothers and Layton Limited, became chairman of the new company in 1923. on the retirement of Sir Philip. He, too, became Lord Mayor of London in 1929. On his retirement from the Chair in 1927, Mr. Edgar Waterlow (now Sir Edgar) became chairman, Sir William remaining on the board until 1928.
Sir Edgar Waterlow, Bt., being the great-grandson of the founder, James Waterlow, is therefore the fourth generation taking a leading position in the business. In 1933 his son Philip was elected to the board and became manager of an important department, thus making the fifth generation in direct succession to take part in the management of the business.
Many of the great British industries were refashioned by the effects of the Great War, and their history opens an entirely new chapter in 1918.
But in the case of Waterlows, the post-war activities and developments have further springs in the period of the war itself - as well as in the cumulative experience of the century preceding.
During the war this firm was confronted with requests and tasks of such great magnitude that this period, so paralyzing and destructive to many industries, caused it to make greater efforts in research and consolidation.
If, therefore, we begin our review of Waterlows in the year 1918, we see a huge organization, wonderfully equipped to take its part in the post-war world of commerce, and to re-establishing connections that during the war had been abandoned.
At that time, therefore, Waterlows had brought their business to a high state of efficiency.
Important developments, however, have taken place since 1918, and the technical side of Waterlows has been entirely remodelled to meet the changing demands. There is a fully equipped laboratory, staffed by qualified chemists, which is unique of its kind. In this laboratory tests of almost every material used in the company's business are carried out in order that the high standard of the products can be guaranteed. From carbon papers to bank-notes, all Waterlows' products must pass the most exacting tests, and any deviation from the standard is rejected.
In addition to the critical work of testing all materials, the technical department has applied the process of the new plastic industry to obtain facsimile reproductions of printing surfaces, while the adoption of high-speed deposition of electrotypes, and the electrical production of wear-resisting coatings for them, has brought this process to a point hitherto deemed impossible.
In processes which are sensitive to changes of temperature, automatically controlled electric heating has been introduced which will keep a temperature within the finest limits.
Patents have been obtained for the production of security documents in which the use of the invisible ultra-violet rays is introduced, while the study of colloids has enabled the company to introduce inks for coating and printing of a fineness hitherto unobtainable. In connection with this, and in view of the company's manufacture of cartons suitable for containing foodstuffs, research has been made which has resulted in all the inks being free from any deleterious substance of any kind.
On the mechanical side the advance has been startling. While preference has been given to British machinery, the resources of the world have been taxed in order that the cost of work should be as low as possible, and the quality of the work as high as mechanical efficiency, combined with craftsmanship, can perform. Members of the company make periodical visits abroad in order to investigate on the spot the latest developments, while in addition to this, the company's own staff of engineers build machines — which are not found on the general market — for special purposes. Thus, in envelope making, the company possesses the only machine of its kind in the world for dealing with the Government contract for telegram envelopes, and printing experts from abroad invariably ask to be shown the company's factories, as representing the high-water mark of efficiency and lay out.
The manufacture of carbonic paper has been brought to the highest pitch of efficiency, the bulk of that used by His Majesty's Government being produced at the company's works at Dunstable, while railway tickets, the making of which occupies a separate factory, are exported all over the world.
For many years past the company has made its own printing ink, but since 1918 this department has been equipped with the latest ink-making machinery, and produces every week many tons of printing ink which is unequalled of its kind.
Even the making of inking rollers for the printing machines has had its attention, and several thousand pounds have been expended in plant to ensure that the rollers shall be of the best quality possible.
The photogravure process was adopted to deal with the well-known British Treasury notes, and to-day rotary presses are used for the production of high-class catalogues and similar works.
The process departments, which include photo-lithography and block work, have been remodelled and are regularly producing beautiful reproductions for the British and other museums, as well as for commercial work. Even the older processes, such as collotype, have been rejuvenated and brought into line to meet the modern demand for high-class facsimile work at a moderate price, while the fame of the company in the production of bonds and bank-notes is known all over the world.
In order to keep their enormous plant, covering every known process in printing, up to the very latest standard, the company spends each year a sum in replacements which would be sufficient to buy the average substantial and fully equipped printing establishment. Machines which did not conform to the very latest principles have been ruthlessly scrapped. In fact since 1918 there has been, not an evolution in the company's factories, but a revolution.
The works of the company comprise six factories in London, one at Watford and one at Dunstable. Of these factories one is devoted entirely to the production of cheques, another to the production of bonds, bank-notes and similar security work; and at Dunstable a separate building is devoted to the manufacture of envelopes. Sports grounds for the benefit of the employees are provided at all three places, and the exploits of the Dunstable Football Team are frequently heard over the wireless.
In 1932, during the salvage of bullion from the SS Egypt, lost ten years before, bundles of bank-notes consigned to an Eastern state, the face value of which ran into hundreds of thousands of pounds, were recovered. The bundles came up from the wrecked ship a slimy black mass, which, when opened out, revealed the bank-notes in perfect condition after ten years' submersion. They had been printed in brown ink on white paper by Messrs. Waterlows. Their true value was only that of curios, because this issue of notes lacked a final signature, and so were not legal currency when the Egypt was lost.
"The wads of notes," The Times of June 13th, 1932, stated, "were spread out to dry, and dried beautifully crisp and almost white after ten years in water, and quite fit to hand over a counter. They were a splendid tribute to the quality of Messrs. Waterlows' printing. The black lettering was still perfectly clear, and had not even stained from one note to another."
The bulk of Waterlows' work is the designing and executing of commercial printing of every kind. Posters, catalogues, booklets, folders, showcards, cut-outs, travel guides, note-headings, engraved labels, are all produced in huge quantities. With its unique equipment in every department of printing and its army of chosen craftsmen, this firm holds itself ready to meet any situation, however large the demand. Twenty-five million sales folders have been delivered at the rate of half a million a day. And yet, because of its high standard of organization, the firm is able to give thoughtful consideration and expert care to the smallest order.
A special department of Waterlows relates to Law Stationery and publications. Thousands of solicitors depend upon this firm for their supplies of general stationery, account books, legal forms and parchments. "The Solicitors' Diary " has been continuously published by this firm for eighty-nine years, and "The Bankers' Magazine," established in 1844, has also been regularly published since that date.
This wide range of work, these batteries of specialized machinery, are connected up with the administrative side of the business in a way which produces a completeness of organization, working with the smoothness of a well-tuned engine.
This has only been made possible by the adoption of the soundest principles of business practice, and the application of modern scientific management.
There are two outstanding features connected with Waterlows that are of general interest in any study of the development of modern industry:
1. This firm was probably the pioneer in British industry in the thorough training of indentured pupils for executive positions. Long before modern industry adopted the system of training future executives by taking young men into factories, and giving them a period in which to see and understand how the commodity with which they were to deal was made and marketed, Waterlows had initiated a system of thorough training by means of a special apprenticeship. Under this, boys who have attained something like matriculation standard in education are bound under a special indenture, and during its currency they spend certain definite periods in each of the departments of the business, beginning with type-composing, machine-minding, and going on through the lithographic, process work, engraving, bookbinding, paper, ink-making, salesmanship and office routine departments. At the end of each period the departmental managers present a careful report on the aptitude of each particular apprentice. These reports are studied by the general works manager, who has frequent interviews with these apprentices; and before the end of the training it is usually quite clear to what particular branch of the business each apprentice should be assigned.
It is an interesting fact that Sir Edgar Waterlow, Bt. (chairman of the company), Mr. Russell Palmer (joint managing director) and Mr. V. E. Goodman (general works manager) passed through this special training.
2. The adaptation of a quickly growing business to efficient control by special departmental management. Waterlows regularly employ a staff of approximately 5,000 workers, with an average weekly wage bill of over £10,000, to cope with work which covers the whole world of needs for the printed word, save periodicals and newspapers. As a matter of business efficiency the question of how work so varied and orders so numerous can be handled without confusion, and with careful attention to the needs of each customer, is interesting from the point of view of scientific management.
The daily mail of hundreds of orders and the dispatch of hundreds of completed jobs; the meticulous care needed in the work of security printing, the avoidance of error in millions of printed words — while this is the wonder and the despair of the uninitiated, it has become ordinary routine to those concerned. This result has been attained by scientific segregation of work. Special departments with a director and manager at their head are in charge of different classes of work:—Banking, Postage Stamp, Crown Colonies, Legal, Railway, Commercial, Editorial, etc. These departments do not overlap. Each is staffed by men familiar with its particular work, expert in its planning, and jealous of its good repute, and customers know that their special needs are understood and met.
The good estate of the honoured name of Waterlow has been jealously guarded, and has come down to the present day as the greatest of the family heritages.
In this connection the gigantic fraud perpetrated upon the Bank of Portugal, the consequences of which fell with terrific force upon this British firm, will be fresh in readers' memories.
This case, which created world-wide interest, was fought in the King's Bench Division, then in the Court of Appeal, and ultimately in the House of Lords. Waterlows were undoubtedly the victims of a very clever gang of scoundrels, who carried out their fraud on a grand scale. Waterlows as printers were held liable for loss which might follow the honouring of the notes put into circulation, and the Court of Appeal by two judges to one, and the House of Lords by three judges to two, supported the claim of the Bank of Portugal. Judgment was therefore given against Waterlows for £610,392 with costs, the total of the cash settlement being agreed at £697,416.
But it is significant to note:
1. During the whole of the protracted legal proceedings not a single word was uttered casting doubt upon the probity and uprightness of the firm of Waterlows. Mr. Justice Wright, who tried the case in the first instance, and whose judgment was in favour of the Bank of Portugal, said in his summing up:
"No one suggests for a minute a word of reflection on the honour or good faith of Messrs. Waterlow, or any of the directors; no one suggests that this is anything which would happen in the ordinary course of business. It is merely one of those most unfortunate circumstances which overtake the most eminent and distinguished and high-class firms in which the wiles of the swindlers for the moment distract the minds of those concerned from the clear sense of what they ought to do in duty to those who have placed confidence in them. It is not a thing which will ever happen again; it is only a series of unfortunate coincidences which has caused it to happen in this case, and I am sure the very eminent and honourable firm concerned can simply treat it as something which merely indicates that the most careful business concerns may under special circumstances make an error, but that it is an error and that it is a breach of duty, having regard to the high trust and the high standard required here, I have no hesitation personally in saying."
Fortunately the important customers which Waterlows are honoured to have upon their books shared the opinion of Mr. Justice Wright, which we have just quoted, and continue to entrust to this eminent firm their orders for security printing with unabated confidence.
2. The other significant (and, indeed, remarkable) fact about this case is that a firm of printers in the City of London paid over immediately the large amount for which it had been held liable — £697,416 — without its ordinary business being interfered with.
A reproduction of the cheque for the amount paid, allowing for £50,000 already in the hands of the Bank of Portugal, will serve as a reminder of the stability of this great House. Situated in the heart of the City of London with many of the Waterlow members closely associated with the highest posts in British civic life, it was a refreshing and encouraging reflection that such a huge obligation should have been immediately met without any sign of extraordinary financial strain or dislocation.
This business was founded in the City of London. Under six reigns, and from great-grandfather to great-grandson in direct succession, it has been built up, and to-day it stands as a great commercial monument of British thoroughness, enterprise and stability.
The evolution of a great business from a small concern to an organization of worldwide repute is of national significance. In it may be read some secrets of the story of British progress since that great period of the Industrial Revolution. Other nations have applied scientific methods to commercial enterprise, but Britain had a great start in the race for supremacy, and in the case of Waterlows new demands have been met by new achievements, new discoveries have been followed by their adaptation to the printing craft, and a new standard of art in industry has been adopted to give printing a proud place in a world of new ideas and new modes of expression.
Waterlows refuse to accept finality in anything pertaining to industry and even though the progress of the next hundred years should eclipse that of the past wonderful century, this business is so thoroughly equipped, so scientifically organized, and so quickened with the spirit of enterprise, that it will be found in the van of progress, and with adequate resources for the call of the days that are to come.