THE CYCLE BOOM & SLUMP
The great boom year in the history of cycling and cycle manufacture has had a tremendous influence on the trade, and history has undoubtedly repeated itself in connection with the sale and manufacture of motor cars and motor cycles.
The boom year in cycling occurred in 1895-96, when the popularity of the pastime for fashionable women became an accomplished fact, and there was a sudden rush for bicycles by a class of people who had never previously given the sport a single thought.
Manufacturers became so full of orders that could not be executed that the astute financial company promoter was attracted to Coventry, Birmingham, and other towns, and the cycle-maker, who had up to that time practically depended on financial assistance from local banks and business friends and acquaintances, found that the most tempting offers were made if they would only allow the company promoter to step in and handle their business by offering it for public subscription.
Some of the larger and better known factories were purchased by the financiers and refloated for enormous sums, far above their previous values. Large amounts went down in the prospectuses for goodwill, patents and other items, which were not very tangible as assets when the inevitable slump came.
Money poured into the coffers of men who had done nothing to build these businesses; they had only been astute enough to see that the market was ripe for flotation, and as the public cried for cycle shares they got them. The result of all the flotations and the buying and selling of the various concerns was that a hmited few made money and a large number of people, many of them workers in the various businesses, lost their savings of many years.
The unprecedented demand for bicycles was afterwards proved to be a little fictitious, because every dealer ordered three times as many bicycles as he expected to sell with the hope of obtaining about one third of them. When the off-season for sales arrived those fictitious orders were mostly cancelled, and as manufacturers could not force delivery on dealers who, if they had been compelled to take the machines they had ordered long after they were due, would have been unable to pay for them, the cancellations had to be largely accepted.
The result of the flotation of many of the cycle firms meant over capitalization. The prospectuses had set forth that as such and such a profit had been earned on the manufacture of a certain number of bicycles, the unprecedented amount of orders on the books at high prices signified a corresponding increase in the profits, which would be more than sufficient to pay the dividend on a largely increased capital.
Alas, the orders were cancelled, society got tired of the new craze and relinquished the use of a bicycle, and the great slump of 1896-97 rushed on the trade with greater swiftness than the boom of the previous twelve months. Over capitahzation meant that many of the older publicly floated concerns and several entirely new firms either reduced their capital by cancelling half the value of their shares or retired voluntarily or compulsorily from the arena.
Two or three very lean years intervened between the slump and the advent of the motor cycle and motor-car.
The motor-car was exploited before the motor cycle in this country, and it was not until about 1899-1900 that cycle makers in the Midlands began to take an interest in the self-propelled machine. The earhest machines were petrol engined tricycles, and from that early commencement the lure of the motor cycle has gradually but surely drawn every important cycle maker to its charms until to-day no important firm is without a motor cycle department, and in many cases the motor cycle branch has become more important and larger than the making of purely pedal cycles.
The present conditions of the trade are possibly rosier than they have been for some time past.
There is an urgent demand for good bicycles and the only drawbacks to a large output are the difficulties in securing regular supplies of the right materials, and the unsettled state of labour generally.
It is estimated that there are about 20,000 employees, men, women, youths and girls, engaged in the manufacture of bicycles and their component parts, exclusive of those who make the accessories such as lamps, saddles, pumps, oil tins, and similar articles which do not come under the classification of a complete bicycle.
THE AMERICAN BICYCLE & ITS INFLUENCE ON BRITISH TRADE
There have been American invasions of this country by makers of agricultural machinery, boots, domestic machinery, typewriters, motor cars, and, of course, bicycles.
Of those articles enumerated all have come to stay except bicycles. Various opinions have been expressed as to the reason why American bicycles did not attract popular favour in this country. They were largely advertised, important firms rented expensive shops for retail purposes, and at one time it looked as though the American bicycle would catch on. The attempted invasion failed; a small army reached our shores but it got swallowed up and the officers retired with discomfiture.
The reason may be explained as follows. American makers produce one pattern of any article in large quantities and expect all purchasers at home and abroad to buy what they make. The American bicycles that reached this country were no exception to the general rule. They were made for American boulevards and asphalte roads of cities and were totally unsuited for touring and general riding conditions in this country. The mudguards and rims were of wood, the tyres were single tubes that could only be repaired with rubber plugs (a method not understood in England), the brakes were inadequate for our hilly roads, and the only redeeming feature of these machines was lightness. They arrived at a time when home manufacturers were at their wits end to supply the demand or practically none would have been sold, and those that were disposed of mostly caused trouble and loss of custom to the retailers.
Today, American manufacturers have changed their tactics, and although no very serious effort has been made to further the export of bicycles from the United States to Europe, the trade ‘over there’ have not lost sight of the possibility of capturing some of the European markets, if not our own British one. Enquiries have been instituted by the American Chamber of Commerce as to the pattern of machine most likely to be demanded, the names of large buyers, their methods of payment, etc, etc. It would be, therefore, unwise to say there is no possibility of a recurrence of American bicycle exports to England; the machines will, however, require to be vastly different from those that were first sent over.
At the time of writing there is an import duty on foreign bicycles of 33 per cent, ad valorem, which constitutes a bar to American exports and it is questionable if, when this tariff is removed, American bicycles could be sold in this country at a profit. By the time our Government has decided to remove the tariff, English cycle makers may be able to reduce prices which, of course, like the cost of other manufactured articles, have gone up considerably.
In 1914 excellent English bicycles could be bought for about £8 8s, and if such prices ever return when tariffs are removed, then I do not imagine there will be very much chance for American machines in this country.