THE MAKING of the NEWCASTLE INDUSTRIAL HUB 1915 to 1950
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THE MAKING OF THE NEWCASTLE INDUSTRIAL HUB 1915 to 1950 Robert Martin Kear M.Bus. (University of Southern Queensland) A thesis submitted in fulfilment of the requirements for the degree of a Master of Philosophy in History January 2018 This research was supported by an Australian Government Research Training Program (RTP) Scholarship STATEMENT OF ORIGINALITY I hereby certify that the work embodied in the thesis is my own work, conducted under normal supervision. The thesis contains no material which has been accepted, or is being examined, for the award of any other degree or diploma in any other university or other tertiary institution and, to the best of my knowledge and belief, contains no material previously published or written by another person, except where due reference has been made in the text. I give consent to the final version of my thesis being made available worldwide when deposited in the University’s Digital Repository, subject to the provisions of the Copyright Act 1968 and any approved embargo. Robert Kear ii ABSTRACT Aim of this Thesis The aim of this thesis is to chart the formation of the Newcastle Industrial Hub and to identify the men who controlled it, in its journey from Australian regional obscurity before 1915, to be the core of Australian steel manufacturing and technological development by 1950. This will be achieved through an examination of the progressive and consistent application of strategic direction and the adoption of manufacturing technologies that progressively lowered the manufacturing cost of steel. This thesis will also argue that, coupled with tariff and purchasing preferences assistance, received from all levels of government, the provision of integrated logistic support services from Newcastle’s public utilities and education services underpinned its successful commercial development. The availability of good coking coal and an operational port first attracted the steel industry to Newcastle. The BHP steelworks was operational in 1915 and by 1921 it had been joined by three new downstream steel fabrication companies which manufactured forged rolling stock products, steel wire and steel sheet products. Led by Harold Darling, Chairman of the BHP board, and Essington Lewis, BHP’s Chief General Manager, the steelworks and the downstream fabrication companies developed and consolidated their manufacturing and financial positions during the 1920s. In parallel with growth of the steel companies, the Newcastle-based public utilities and heavy engineers, which provided the industrial logistic support base on which the steel industry relied, developed in parallel. The combination of organisational changes, government support and the introduction of improved technologies progressively lowered the cost of steel manufacture and increased the Australian steel industry’s competitive position. This was a factor which enabled the NIH to survive and recover from the Great Depression of the early 1930s. The Great Depression was immediately followed by a boom in industrial growth by the Australian steel industry. In parallel with this manufacturing growth, from 1935 the NIH was progressively prepared for war. The declaration of war in 1939 found the NIH ready to manufacture the wide range of steel products and munitions required for war in quantity, until the end of the conflict in 1945. War encouraged innovation in the NIH, with a number of special products developed and manufactured by the BHP steelworks and each of the steel iii fabricators. The labour shortages which ruled between 1942 and 1944 saw female workers recruited to work in the steel industry for the first time. However, economic uncertainty at the end of the war saw an eruption of industrial relations problems in the steel and coal industries. This caused considerable industrial disruption between 1945 and 1950. In 1950, Darling died and Lewis retired, but with these driving forces gone the NIH was left seeking strategic direction, a problem that was not overcome until the 1960s iv ACKNOWLEDGEMENTS First and foremost I would like to extend my sincere thanks to my supervisors, Professor Nancy Cushing and Dr James Bennett for their continued support, encouragement and patience throughout my M.Phil candidature. The critical feedback I received from both supervisors and their exacting standards have improved this thesis immeasurably. I would also like to thank the Auchmuty Library staff and the staff in the Newcastle Regional Library for their tolerance of the questions that I sometimes asked and their good hearted assistance. I would also like to thank Professor Jo May for her comments on the completed thesis. I would also like to extend my love and gratitude to my wife Kerry for her tolerance and understanding, for without her enduring support, my journey through the university and this candidature would not have been possible. Lastly, I would like to thank my fellow Ph.D. and M.Phil students for their ongoing encouragement and support. v TABLE OF CONTENTS Statement of Originality…………………………………………………………… ii Abstract……………………………………………………………………………… iii Acknowledgements ………………………………………………………………. v Table of Contents ………………………………………………………………….. vi Figures ………………………………………………………………………………. vii Tables ……………………………………………………………………………….. viii Chapter 1: …………………………………………………………………………… 1 Chapter 2 ……………………………………………………………………………. 20 Chapter 3…………………………………………………………………………… 46 Chapter 4 ……………………………………………………………………………. 67 Chapter 5 …………………………………………………………………………..... 95 Chapter 6 ……………………………………………………………………………. 127 Chapter 7 ……………………………………………………………………………. 151 Chapter 8 …………………………………………………………………………….. 171 Chapter 9 ……………………………………………………………………………. 189 Chapter 10……………………………………………………………………………. 209 Bibliography ……………………………………………………………………………. 215 Appendices: A Coke Ovens and BHP By-Products 232 B Manufacture of Bullet Proof Steel 234 C Manufacture of Tungsten Carbide 236 D Manufacture of Manganese 238 E Charter Given to the Director of Munitions – 240 Essington Lewis 22 May 1940 vi FIGURES No Text Page 1.1 Map of the Newcastle Industrial Hub, 1948 4 1.2 The Newcastle Industrial Area in 1935: View East, 5 Showing Stewarts and Lloyds, Lysaght, Ryland Bros. (Aust) and the BHP Steelworks 2.1 Launching the Newcastle Floating Dock, Walsh 42 Island Dockyard and Engineering Works, 1928 3.1 Coal Tar Derivatives 53 3.2 Typical BHP Spares and Tools Shadow Board 55 5.1 Lewis and Darling at a Newcastle Club Dinner in 97 1935 5.2 Stewarts and Lloyds Continuous Weld Tube Mill in 98 1935 5.3 The Newcastle Industrial Hub in 1935 105 5.4 Timeline of the Preparation of the Newcastle 116 Industrial Hub for War 1933 – 1940 5.5 Assembled Anderson Shelter 126 6.1 Cutting and Stacking Bullet-Proof Plate Components, 140 Lysaght 1941 7.1 Woman Machinist at Stewarts and Lloyds in 1942 155 7.2 Stewarts and Lloyds VDC Company on Parade in 170 1943 9.1 Platt’s Channel and Spit Island 197 9.2 5100-ton Schloemann Forging Press 199 9.3 BHP Fleet tied up in Newcastle in 1949 208 vii TABLES No Text Page 3.1 Steel Production and Employment at BHP, 59 1925−1930 3.2 Commonwealth Steel Company Production, 61 1923–1930 3.3 Horsepower of Factories in New South Wales, 62 Selected Years 4.1 Australian Domestic Debt Burden in 1929 69 4.2 Australian Balance of Trade 1930-1931 77 4.3 Steel Production and Employment Variability 83 between 1929 and 1934 4.4 NIH Steel Fabrication Companies — Production 84 and Employment Variability, 1929–1934 4.5 Prices of Australian and British Iron and Steel 85 (Sterling per Ton) 4.6 Equipment Installed at the BHP Steelworks 91 between 1930 and 1934 5.1 Munitions Annexes Established in Newcastle, 1939 123 6.1 Wartime Products Manufactured by Companies in 135–38 the Newcastle Industrial Hub 6.2 Hunter District Water Board Workforce 1939−1944 145 7.1 Australian Steel Ingot Production 1938/39 to 152 1944/45 7.2 Nominal Real Wages 1939 to 1946 157 7.3 Black Coal Production in Australia in 1942 164 7.4 Working Days Lost in Industrial Disputes 165 1939–1943 7.5 Diploma Course Enrolments in Newcastle 167 1918–1944 8.1 Prices of Australian, British and United States Iron 175 and Steel 1938 and 1946 8.2 Principal Imports of Iron and Steel into Australia 176 1944–1950 vs Australian Production 8.3 Steel Production and Employment, Newcastle 180 Steelworks 1942–1950 viii CHAPTER 1: INTRODUCTION Colin Forster, in his 1964 book Industrial Development in Australia 1920–1930, observed that industrial history in Australia is a neglected field.1 Little has changed in the ensuing half century, particularly in the case of regional industrial centres such as Newcastle, Australia. This thesis seeks to address this gap through a close study of the factors which influenced the development of Australia’s first large-scale manufacturing centre in Newcastle between 1915 and 1950. It was in this period that Newcastle became the site of a fully integrated manufacturing complex and logistics network, capable of high levels of production and technological innovation. With encouragement from the Federal and State Governments, together with carefully nurtured trans-national commercial arrangements, by 1920 this centre had commenced to develop into a large-scale multidisciplinary manufacturing and logistics network. This network, or cluster, existed because of the geographic concentration of associated firms and organisations involved in the chain production of steel goods and associated services. The firms and organisations involved in the Newcastle industrial cluster, because of its geographic separation from