Henry Osborne O’Hagan 1853-1930
Henry Osborne O’Hagan (“Osborne” to his friends), despite being called in his heyday (on both sides of the Atlantic) “the Napoleon of Finance”, is an elusive figure. He has, for example, no Wikipedia article, and only a short and incomplete mention in the Dictionary of National Biography. He is only mentioned in this website because, towards the end of his career, he got involved (ill-advisedly as he not-so-cheerfully admitted) in the cement industry. Later, in his last decade, he wrote a rambling and vainglorious collection of autobiographical snippets entitled Leaves from my Life (Note 1). Because no other major figure dared to write down their impressions of the history of the time, this book has become the most often quoted, and often sole source for historians of the British cement industry in the early twentieth century, despite its obvious unreliability.
Armed only with Leaves, it is difficult to produce a reliable sequential account of his life, because the book is essentially a collection of anecdotes, in no particular order, and with very few dates – and even those are vague. Another problem is his tendency in life to be “of no fixed abode” – he acquired a number of pieds à terre, none of which could be regarded as a permanent address, and between which he moved incessantly. However, with a certain amount of reading between the lines, and reference to external sources on the events he describes, a fair picture emerges.
His father
His father, by contrast, being a well-respected member of the Institution of Civil Engineers, received a reasonably detailed obituary when he died, and it is worthwhile recording his life, if only because much of it mirrored the events of his son’s life. Henry O’Hagan (b 1819, d 7/3/1869) was a son of a pig farmer living near Ballymena, Co. Antrim. As a child he developed a self-taught proficiency in mathematics, and at the age of twelve, he was taken on by the Ordnance Survey of Ireland to perform surveying calculations and drawings. At the recommendation of Capt. Henderson RE, in 1833 (aged fourteen) he moved to England to work in the mapping of the Tithe Survey. He worked on several parish surveys, and when the Tithe Survey was complete, he moved on to railway surveying work, which proliferated during the “railway mania” of the 1840s. He worked for Charles Blacker Vignoles (Note 2) surveying for the North Kent railway connections into Chatham, and on 22/7/1846 he married Emily Buchanan (b 1828 Woolwich, d 1898) in Chatham.
Shortly after this he became a Resident Engineer on the Lancashire and Yorkshire railway, and the family stayed in Blackburn from 1846 to 1853. The family appears there in the 1851 census at 70, Montague Street (Note 3). Here he worked with John Watson (Note 4). Five children were born there: Emily Ann (b 5/10/1847, d 27/3/1916), Rosalind Sharples (b 27/3/1849, d 20/5/1853), Henry Cook (b 8/6/1850, d 1/1851), Thomas (b 6/10/1851, d 4/5/1907) and Osborne himself (b 13/3/1853). In September 1854, the family moved back to Chatham, where Rosalind (“Rose” b 1857, d 29/8/1917) and Charles George (b 6/1858, d 9/9/1859) were born. At the 1861 census, the family were at 2 Duncan Place, New Road, Chatham (Note 5).
It's significant that Osborne was the “replacement” for eldest son Henry Cook O’Hagan, who died in infancy. He received what might have been a good – or at least expensive – education at Rochester Grammar School and at a private school in Streatham, but he admits that he did little study and acquired little or no academic knowledge.
His father had begun serious overseas work, as Resident Engineer on the Cie. de l’Ouest‑Suisse railway 1855-1857, and 1858-1864 on the Tudela and Bilbao railway, again working for Vignoles on these projects. While still supervising that work, he was taken on by John Watson to work on the Bahia-São Francisco Railway in Brazil.
It was at this point that the O’Hagan family received a lesson in what the casual misjudgements of City financiers could do to ordinary people. The bank of Overend Gurney was originally set up to deal in discounted promissory notes. In a time of poor returns it decided to boost its liquidity by means of investment in prestige projects and launched the Contract Corporation to manage these. Among the corporation’s targets for acquisition was John Watson’s railway contracting company. John Watson very wisely sold out to them for a large sum. Henry O’Hagan enthusiastically participated in the new organisation and invested all his savings in it. However, on “Black Friday” (11/5/1866) it emerged that Overend Gurney had run out of cash, and the Bank of England refused to bail them out. There followed a run on Overend Gurney and many other banks, and it and its subsidiary the Contract Corporation went bust. Henry O’Hagan ended up with no job and no money. Education for the children ceased.
The family house in Chatham was sold, and they moved into lodgings in London. Henry made ends meet with occasional ad hoc consultancy jobs. He was in 1869 given a temporary job by Waring Brothers to assess a project to build a railway to portage full-sized ships across Honduras from Atlantic to Pacific. According to The Times, having perused a contour map of Honduras, it would be “as well try to build a ship canal to the moon”. According to Osborne, his father himself thought the scheme insane, but he needed the money and travelled to Honduras. The inevitable failure of the scheme was a moot point, because on an eight-day trip into the interior, he contracted an unspecified tropical disease and died within a few hours of his return to the coast. He was finally buried in Brookwood cemetery, and, much later, Osborne erected a substantial monument over his grave.
Immediately, the family were in serious financial trouble, but there was a small life insurance payment (which had to be wrung out of the insurer because of the doubtful circumstances of Henry’s death). More importantly, he had contributed to the ICE Benevolent Fund, and they now made a substantial cash donation to help the family out. Osborne refused (so he says) to take any of this money, insisting that it should support his mother and sisters. Later in life, when he had unlimited resources, he continued to ensure that his mother and sisters lived comfortably.
Osborne’s attitude to his father had been somewhat equivocal. In his first Leaf, he says:
he was a man unfit to have the management of children or to gain their confidence, although I never received any actual unkindness at his hands (Note 6).
Osborne was always playing for approbation, but:
during the whole of my childhood my father centred his affections, hopes and beliefs on my brother – who was my senior by a couple of years – because he was studious and had the reputation of being clever, while I was deservedly looked upon as a young ne’er-do-well who merited more kicks than halfpence (Note 7).
The Institute of Civil Engineers’ obituary was more complimentary:
Mr. O’Hagan occupied a respectable position in the profession, and was highly honourable in all the relations of life. It deserves to be recorded, to his credit, that he was almost entirely self-educated. He was a great reader, possessed a very retentive memory, had the gift of acquiring foreign languages with facility, and the capability of readily using and applying the knowledge he acquired. Amusing and entertaining in conversation, no subject came amiss to him; and while he had many friends, he is believed never to have made an enemy.
Osborne might have said that he inherited all these characteristics, except that of language skill. Despite living his last decade in France, he hated speaking French and took some pride in claiming to have almost completely avoided doing so.
Queen Victoria Street
Having refused (he claims) any assistance after his father’s death, in mid 1869, using family connections, he got a job in the City as a junior clerk at City solicitors Walter Webb & Co. for 10s a week (~£70 in 2024 money). He began to expand his so-far limited abilities (he claims) by reading The Times from cover to cover during two to three hours every day, a practise which he continued for the rest of his life. He then expounded at length on whatever he had learned, to anyone who would listen. He actually admitted that by doing this:
. . . you will get credit for knowing a good deal more than you do (Note 8).
His other strategy for winning friends and influencing people, was to “collect amusing stories”. He claims to have amassed over eighteen thousand of them. Presumably he had counted them – or had someone count them for him. Thus, by recounting these stories with as unstudied an air as possible, he came to claim a reputation as a first-class raconteur.
By general application combined with bonhomie he gained for himself a desk in his boss’s office and was able to absorb the high-level operations of the firm. A major part of its business was in facilitating the Acts of Parliament and Board of Trade Orders which were required for the approval of major construction projects. This involved interaction with parliamentarians, barristers, and people in all levels of local government. A scheme was proposed to install a tram system in the Manchester area, and Osborne, now on £3 a week, was sent up there to deal with the locals – getting agreement and reducing dissent “below danger-point”. He claims:
I was well fitted to this work, as I had the art of making myself agreeable to those of whom I was asking a favour (Note 9).
The Manchester tramways project failed at least for the time being because, he says, the Manchester Carriage and Omnibus Company had three Manchester aldermen on its Board of Directors.
Taking offices
He put this down to experience, and when nearly twenty (he claims) he thought “the time had arrived when I should strike out for myself”. His first dateable activity, with others, was the launch of the London and Liverpool Financial Association on 9/10/1873. Shortly afterwards followed a course of events (for which, strangely, there is no Leaf) at the beginning of January, 1874, when he was “styled a financial agent, carrying on business at 18 and 20 Queen Victoria Street” (Note 10). The latter were in fact the offices of his old employers, Walter Webb & Co. He ended up in court at the Old Bailey, in a private prosecution for fraud. He had approached John Wright (b 1831 Osmaston, d 1901), JP and Deputy Lieutenant of the County of Derby, with a prospectus for a new company to run one of the collieries at Dearham, Cumberland. Having duly impressed him, he charged him £90,000 for shares which in fact cost only £60,000. Osborne’s case was improved by jocular exchanges in court, suggesting that no sensible person could be “imposed upon” by so callow a youth, and by the suggestion that Wright “appeared to be a man of no great ability”. In the end, the case ended because of lack of acceptable evidence, and the jury was ordered to acquit. The withdrawal of the prosecution was brought about by the return to Wright of most of the disputed £30,000. In December 1875, Osborne brought a case of malicious prosecution against Wright and was awarded £350 in damages. In both cases, it was made clear that Osborne won notwithstanding his obvious guilt.
It is clear from the court records that this deal was by no means the first he had been involved in, and he and his friends obtained large commissions for various similar deals. Besides Wright there may have been many others equally aggrieved, but less litigious. From now on in his life, income was measured in round thousands rather than shillings and pence.
This period is only vaguely described (there are no dates) in the Leaves, but it appears that, perhaps while still working for (or at) Webb & Co., he came under the influence of Albert Grant (Note 11) who, among other shady deals, was setting up the Lisbon Steam Tramways Company Ltd (floated 7/1871, wound up 7/1875) .
He built upon his lessons learned in Manchester (and Lisbon) and began to promote steam tramways. His first venture was the North Staffordshire Tramways Company (Note 12), set up to augment the existing tramway system in Stoke on Trent. Although Leaves gives the impression (deliberately?) that this was accomplished when he was barely twenty years old, the company was floated on 4/12/1878 and finally commenced operation on 21/12/1881 – Osborne was 28. In Stoke on Trent, there was the advantage of a pre-existing tramway – “a wretched old concern in a dilapidated state” – between Hanley and Burslem (Note 13), which the new company took over in 1880.
His first job was to schmooze Stoke-upon-Trent corporation (Note 14) into giving him outline permission to proceed. He then approached the other councils in turn, using his progress so far to provide momentum, until he had passed the critical ratio of backers to objectors, the whole process having taken (he claims) only ten days. Having no capital, his next task involved gathering a small consortium of investors who would provide the cash to hire the necessary surveyors and engineers to plan the tramways. The rest was easy:
To get the Parliamentary sanction to the construction of steam tramways through the Pottery towns was now only a question of a few months. There was no difficulty in raising the necessary capital, and the construction and equipping of these lines gave me profitable work for two or three years. I then went to work and obtained Parliamentary powers for the construction of tramways in many towns (Note 15).
It is clear that, for one who had been subsisting on £250 a year, the five-figure sum he made from this first deal was transformative. An avalanche of similar projects followed, presumably proceeding concurrent with the Potteries job, and financed by the commissions he was receiving. Companies were launched as follows:
- 1881 Stockton and District Tramways Company: Tramways Trust Company (Worcester): Woolwich and South East London Tramways Company.
- 1882 Birmingham and Aston Tramways Co. Ltd.: North London Tramways Company.
- 1883 Gateshead and District Tramways Company: Manchester, Bury, Rochdale and Oldham Steam Tramways Company: South Staffordshire and Birmingham District Steam Tramways Company: West Metropolitan Tramways Company: Wigan and District Tramways Company.
- 1887 Croydon Tramways Company.
Schemes were also launched in the Netherlands and Germany. Also during this period, Osborne arranged (1882) the formation of the Metropolitan Brush Electric Light and Power Co. Ltd. – a pioneering business in electrical engineering, initially addressing the market for electric arc lighting.
During the period of the tramways projects, on 27/5/1878 at St James Paddington, a curious double marriage occurred: Osborne married Elizabeth (Bessie) Jones (b Pimlico 24/2/1858) and Ramon Gardeazabal – a Spanish merchant - married Osborne’s older sister Emily.
A few years later (1885) Osborne got involved (again – no Leaf) in a bizarre divorce case (Note 16), being named as co-respondent. The divorce was not granted because the petitioner withdrew his case. It emerged later that Osborne had paid both husband and wife substantial sums to do this, and to begin new proceedings in which a new co-respondent – nominated by Osborne – would be named. A long and well-publicised series of court cases followed.
Following closely upon the tramways work, and inspired by the very lucrative flotation of Guiness, Osborne began gathering information on British breweries that could benefit from consolidation and updating. Dealing with the relatively primitive and rustic small local brewing companies was a preparation for his later experience in the cement industry. He very rapidly organised the incorporation of many breweries as limited companies, including:
- 1887 Daniell & Sons Ltd.: Hull Breweries Co. Ltd.: Northampton Brewery Ltd.: Nottingham Brewery Ltd.
- 1888 Barnsley Brewery Co. Ltd: Manchester Brewery Co. Ltd.: Springwell Brewery Co. Ltd.: Taylor’s Eagle Brewery Ltd.
- 1889 Edinburgh United Breweries Ltd.: Massey’s Burnley Brewery Ltd.: Parker’s Burslem Brewery Co. Ltd.: Plymouth Breweries Ltd.
- 1890 Newcastle Breweries Ltd.
One or two other British breweries were incorporated in subsequent years, but a more significant development took place during the flurry of activity in the late 1880s; it was suggested that he perform a large-scale amalgamation of breweries in Rochester, New York. This resulted in the formation in 1889 of the Bartholomay Brewing Co. Inc. This was brought about entirely by employing agents; Osborne never visited the United States, but from then on, he administered a great many deals there, all done by telegraphic contact with his agents, among whom were UK brewers. This deal was followed by a flurry of US brewery flotations, all performed in a rapidly expanding market. In all cases, the boards of the companies were loaded with Osborne’s favourite UK brewers. It would appear that this was a period of making easy money during which Osborne’s bank balance reached critical mass.
The American connection led him to look at transatlantic trade links, and Osborne facilitated the merger of T J & Joseph Eastman Inc., which was the first US meat packer to send refrigerated meat to the UK in 1875, and John Bell & Sons Ltd., who were their sole UK distributors, as well as distributing produce from Australia, etc., with hundreds of outlets around the UK. Eastmans Ltd. was incorporated in 1889.
At the same time, Osborne’s now large US organisation became aware of what probably became his most lucrative deal. Chicago in 1889 was at the peak of its exponential growth, doubling its population in a decade, and becoming the second city of the United States. It was the world’s greatest railway hub, serving as the entrepôt of the mid-west and the Great Plains, gathering agricultural produce and funnelling it into the east coast ports and onwards. The Chicago stockyards received cattle from all over the west, slaughtered and packed it and shipped it to the east for home consumption and export to Europe. The chance arose to set up The Chicago Junction Railways and Union Stockyards Inc., streamlining the whole operation. The flotation of this monopoly corporation was extremely complicated because of the multitude of stakeholders, but after a brief dip, the shares rose rapidly in price and Osborne was able to dispose of his shareholding at a large profit.
He became involved with a number of other meat packing concerns, with mixed outcomes. Much later (although he provides no dates) he complained bitterly of the effects on the meat market of Upton Sinclair’s The Jungle (actually published in 1906) which, by revealing the appalling conditions in the US stockyards, put British buyers off US meat. As it turned out, the event had little economic effect, since the US packers simply diverted their output to the expanding – and much less discriminating – home market, while the British market seamlessly transferred to frozen meat from Argentina. The practical effect of the book was the hurried introduction in the US of the Pure Food and Drug Act and the Meat Inspection Act. By the time worried British investors in Osborne’s firms had visited the US packers, these laws had taken effect, and they reported effusively on the cleanliness and humanity of the operations (Note 17).
In 1891, Osborne makes a rare appearance in the census (Note 18). He was staying at his Hampton Court riverside house, with his mother and his now-widowed elder sister.
In 1892, Osborne organised a consortium to take over the Leyland Line of shipping, creating Frederick Leyland & Co. Ltd. This subsequently sold out to the US International Mercantile Marine Co., at a substantial profit.
In 1895, Osborne engineered the expansion of the International Tea Company into the International Tea Company’s Stores Ltd. (later International Stores), which became another of Osborne’s companies to form part of the origina1 FT30.
During the 1890s, Osborne lists a large number of flotations and speculations, all undated and impossible to verify, except perhaps the Trinidad Lake Asphalt Co. Ltd.: 1897?
It need hardly be said that by no means all the firms he set up were successful, even in the short term. But in most, Osborne functioned purely as promoter, and he had pocketed his commission and gone long before things went bad. However, in his 40s, at a time when he was seriously considering retiring to a life of leisure, he encountered the cement industry and got sucked into a maelstrom.
Cement Industry Amalgamation
His first acknowledged brush with the cement industry occurred (he claims) in 1896 (Note 19), when William Tingey Jr (Note 20) asked for advice on the conversion of his family cement business into a public company. Osborne did some research on this; the firm owned only two small, old-fashioned cement plants at Frindsbury, but also had a near-monopoly of chalk supply for the many other plants in the area. He claims that he obtained a useful understanding of the industry in the process (without the inconvenience of visiting any cement plants), but concluded that the present scheme was not viable, due (he says) to the limited abilities of the people involved.
In August 1997 he had sailed his yacht Vanadis to Bodø in Norway to look at a mining prospect in the company of a “London merchant”. The latter, on Osborne’s casual mention of his interest in the cement industry, told him that he knew that several of the major companies (with which he was on close terms) were talking about a merger. He promised to arrange a meeting, but Osborne heard nothing further about it.
In October 1899, he was taken aback by a summons from an unspecified company to attend at their office. Osborne, naturally, was used to people coming to him. This seemed like an invitation worth ignoring, but “not being particularly busy” his curiosity got the better of him. It turned out to be Martin, Earle & Co., the imperious summons having been issued by Edward John Vavasour Earle. It’s not inconceivable that Osborne would have seen the article on this firm published in The Engineer on 30/6/1899 (Note 21), although he writes of them as hitherto unknown to him. He says (presumably prompted by Earle) that they were regarded as interlopers by the older firms. They wanted to amalgamate six local firms to make business more profitable. Osborne, having made clear his knowledge of the business, was invited to facilitate the deal. Earle, having heard mention of Tingey’s business, said (Osborne claims) that they were:
too old-fashioned, and although at the top of the tree, will not remain there long” (Note 22).
Osborne said he would think it over, and immediately got in contact with his Norway friend, saying that if his cement industry contacts wanted to avoid being upstaged, they should talk to him immediately.
This had the desired effect. John Bazley White (the third: Note 23) and his solicitor, H S Leonard arrived and explained their scheme – to amalgamate the whole British cement industry. Their company, which was the largest UK cement manufacturer, had given White and Leonard six months to concentrate on this project. They had already talked to “a large number” of firms who were mostly agreeable. However, they had had no luck in trying to get hard facts for valuations from any of them. This sort of work was right up Osborne’s street, and since he had already formed a fairly negative opinion of financial competence in the industry, he knew he could easily dazzle them, so this appeared to be an easy job (Note 24), and large enough to yield big commissions. He made his proposal to them, they agreed, and he set up a small syndicate – British Incorporators Ltd., its function being to acquire cement plants piecemeal, then once the collection was complete hand them over to the newly-floated Associated Portland Cement Manufacturers Ltd. It was left to White and Leonard to negotiate with the prospective sellers on agreed lines before handing the details to Osborne who would make the purchases. Osborne prepared a lengthy do-list for them to work their way through. Then in December 1899, he sailed off to the Mediterranean in his yacht.
Osborne claimed in retrospect that he had had some reservations about White and Leonard’s abilities to carry through the work – if so, his concerns were justified. He said that the few negotiations attempted “got little beyond talk, talk, talk”. This prefigures the standard of discussion that later characterised the board of APCM. They reported back at the end of January that there was no likelihood of progress until Osborne returned. Osborne had expected to continue his holiday until April, but he made what was intended to be a brief return home early in February – no doubt in a grim mood – determined to kick-start the process once again. He placed the “large party of friends” that had accompanied him on his yacht into a villa at Montecarlo – at least they got their holiday.
He soon came to the conclusion that White’s were (so he says) incapable of the work, and he had to do the negotiations himself. He grimly set up a punishing 7-day-a-week regime in order to “keep my friends interested”. The regime as he describes it was:
- Monday to Friday: At his office, interviewing and negotiating with prospective sellers as sourced for him by White. Every evening from 8:30 pm until 1 or 2 am, dinner at the Albany (Note 25) with White and Leonard, with progress reports and de-briefing.
- Saturday: up to 8 or 9 pm in the City, instructing accountants, valuers and solicitors in the current purchases, and getting their feed-back.
- Sunday: all day at the Albany, reviewing the week’s work and preparing for the next week.
It was, he said, “absolute drudgery in which I really had not a soul to assist me” (Note 26).
This regime continued from February to the end of June, 1900. At what was considered to be the end of the process, the flotation of APCM could be conducted. Retrospectively, it can be seen that the original objective – to amalgamate the entire British industry – was not achieved, and in fact fell so far short of the required critical mass, that APCM did not have the desired monopoly power, and therefore failed to operate effectively throughout its first two decades. These shortcomings are discussed in another article (Note 27).
However, O’Hagan and his friends assessed their progress in a very short-sighted manner, and by July 1900 they concluded that the work was sufficiently well done. The chief deficiency was the casual and arrogant dismissal of the importance of the cement plants outside the Thames/Medway area, which in fact already had more of the market than was realised and were expanding far more rapidly than the local companies. O’Hagan, usually very analytic about the industries he dealt with, obviously acquired this dismissive attitude through excessive contact with the Whites, besides which he was probably eager to get shot of this irritating project.
There were also local companies that were missed out, the most glaring example being the West Thurrock plant which went on to become the biggest in Britain. Four companies – Martin, Earle & Co.: William Lee, Son & Co. Ltd.: Wouldham Cement Co. (1900) Ltd. and the Queenborough Portland Cement Co. Ltd. – all preferred to stay out of the amalgamation but agreed to engage in “working arrangements” with the combine, should it form. The Wouldham company was a 50:50 joint venture between Whites and S Pearson & Son Ltd., and Osborne had in fact set it up for them as a public company that year. The target price to be negotiated for each company was based on the book profit of the three previous accounting years – a rather blunt instrument. The above four considered that this price was unacceptable. As it turned out, the price paid for many of the small firms was excessive, as was the capitalisation associated with them, because most of them were immediately shut down, and could not realise even scrap value. The underlying reason for this was that the amalgamation took place at exactly the time when rotary kilns – a classic disruptive innovation – were being introduced, rendering all calculations based on past performance more or less null and void.
Any realisation of these defects was drowned in the relief of putting the project to bed and floating the company. Osborne was proud of the “very attractive prospectus” (Note 28) and public subscription was called during 15-21/7/1900. This proved to be a bad time to float the company. The market was already skittish due to poor progress in the Boer War, when on 16/7/1900 – the second day of subscriptions – an article appeared in The Times stating that, as a development in the Boxer Rebellion, all foreign legations in Beijing had been massacred. As Osborne said:
. . as it was the custom of The Times to verify information sent it before admitting such announcements into its columns, a terrible panic occurred on the London Stock Exchange. True, The Times headed its announcement that the news was published by the courtesy of the Daily Mail. That was passed by unnoticed; it was taken as a properly verified announcement by The Times. The panic created was so great that all securities on the Stock Exchange depreciated, and for some days it was practically impossible to sell anything” (Note 29).
The announcement was soon shown to be a complete fabrication, but the damage was done. Cynics might guess that investors sceptical about the APCM used the panic as a reason to give it a miss or to short sell it. As Osborne cryptically observed:
No doubt thousands of persons like myself suffered severely by this dissemination of false news. As many suffered, no doubt some profited” (Note 30).
Osborne was better placed than most to know who did what, but he chose to say no more about it.
At the close of sale, they were around £2.5 million short of that needed to complete the purchases. Osborne had mentioned that, prior to the launch “it was not considered necessary to go to the expense of underwriting the capital; it was thought that more confidence would be given by the announcement that the issue was not underwritten”. Osborne was faced with covering the deficit himself. It was put – somewhat forcefully – to the vendors that they might take their payment in the rapidly-depreciated shares, given confidence that the company would soon bounce back. However, to Osborne’s intense irritation, three vendors saw this move, understandably, as a prima facie breach of contract, and backed out of the amalgamation. These were I C Johnson & Co. Ltd.: Trechmann, Weekes & Co. Ltd. and the West Kent Portland Cement Co. Ltd. Osborne’s irritation was greatest with Johnson’s – they were one of the big Thames firms and had been one of the prime movers of the amalgamation, awarded three of the directorships. In fact, Johnson’s directors were in favour of the deal, but it was voted down by shareholders. Osborne, who always hated losing a fight, immediately sued all three firms for breach of contract – cases which went on for several years without resolution, and the defendants in the end only paid their own costs (Note 31).
Running APCM
APCM’s first head office was 3, Tokenhouse Buildings, Kings Arms Yard, near the bank of England – Osborne’s own offices. It was not Osborne’s habit to get involved in the operation of the companies he created – in fact, he probably lacked the necessary skills. However, APCM was different. He says:
I was not broke, but very badly bent. The profits of the promotion of APCM dwindled to £10,000, while I had lost over £200,000 in realising stock and in taking up shares” (Note 32).
A lot depended on getting the ruins of the new company back into workable shape. The first problem was that of the size of the Board. The 26 directors mentioned in the prospectus had swollen to 34 (Note 33), most of them the owners of a plethora of tin-pot cement companies who were tempted in by the offer of a directorship. At Osborne’s insistence, the actual operation of the company was put in the hands of sixteen managing directors. In retrospect this number was seen still to be far too large.
Osborne initially sat in on all board meetings although not a director, but in 1903 he decided to give the company “the full benefit of my services in all matters, even to the exclusion of my own business” (Note 34), and took a directorship; in 1904 he was made co-vice-chairman. Just how committed he was is not altogether clear: on the one hand he tearfully says that “I lived and slept in an atmosphere of cement”, but on the other hand “I stipulated that as it was usual for me to spend the winter months in the South of France, I could absent myself from the board meetings for 6 months in any one year”. He had had his house built at Roquebrune in 1904, and one of his management techniques was to invite various board members there for “holidays” – or even formal meetings – thus ensuring their compliance with his ideas. He frequently quips that, due to all this slavish labour, he was wasting away, being only 20 stone (127 kg) and could not be expected to survive the rigours of an English winter.
A major bugbear of the new company, which loomed large throughout Osborne’s time in the industry, was the investment in rotary kilns. This had been organised by White’s before the formation of APCM. They had adopted, at the suggestion of Bertram Blount, the Hurry & Seaman design – one of several in operation in the USA – and had contracted (11/8/1899) with the patentees’ agents to produce a limited quantity under license, and with ongoing payment of royalties, with the anticipation that they would have exclusive rights to the process. This deal, in itself, was excessively expensive and limiting, but importantly, it was made without anticipating a number of developments that would very soon follow:
- The patents became unenforceable, and anyone could gain access to the technology for free
- The technology acquired was still very immature, and the plant would become obsolete almost immediately, so it would be necessary to make massive modifications or replacements of the plant within a few years, at great expense.
- 1892-1898: Vanadis – a 200-ton screw schooner with a 60 HP steam engine.
- 1899-1905 Normania – a 423-ton screw schooner with a 105 HP steam engine.
The idea that they had bought a pig in a poke was not to be countenanced by APCM or by Osborne. The company continued to maintain the uniqueness of their massive rotary kiln installation even when it became clear that two other companies had commissioned rotary kilns before the start of APCM’s first kiln in March 1901. Other companies, delaying investment in rotary kilns by a few years, were able to obtain better technology from the outset.
Osborne’s contribution was to buy out the patents, so that the company could install kilns ad lib and without paying royalties, but he paid £180,000 for them, and they were in any case valueless; added to the company’s book assets at face value, they were after some years quietly written off.
The early years of APCM brought Osborne into contact with Weetman Pearson – a plutocrat of enormous wealth to whom even the likes of Osborne had to defer. S Pearson & Son Ltd. was at the time probably the biggest civil engineering contractor around, and had gained the contract for construction of the Admiralty harbour at Dover. They needed a steady, large supply of cement over a period of ten years, and it was characteristic of the pre-1900 cement industry that no cement firm dared contract for so long a period, nor were they willing to form a consortium of supplier firms. Pearson’s were not going to let this stand in their way, and rather than buy German cement (which would probably have been the best option), they bought the Wouldham plant on the Essex bank of the Thames, and prepared to up-rate it to the required size. In order to get the best technical knowledge available (such as it was) to run the plant, they entered into a 50:50 joint venture with John Bazley White & Bros. Ltd. Osborne, retrospectively, though that JBW were crazy to engage in setting up a major competitor for their own business; JBW said that they had no choice but to comply with the wishes of their biggest customer. As mentioned before, Osborne had organised the flotation of Wouldham as a public company in order to finance the major up-grade of the plant that would be needed – this was an easy and well-paid job.
After APCM had formed (without Wouldham), “the erection of these works became a thorn in the side of the Associated company”. Pearson’s were themselves contractors for the upgrade and were over-spending beyond the available funds. “They seemed to be running the concern as though it was their own and not that of a public company”. Furthermore, the joint venture agreement required that APCM should dispose of any surplus cement from Wouldham at a minimal premium, so that in reduced market conditions APCM had to stand down plant while Wouldham continued to run. The only solution was to sever connection with Wouldham, and in 1903 Osborne was tasked with negotiating this. There followed a dispute about payment for a cooperage provided by APCM, with arbitration by Osborne, that occupied most of 1904.
Wouldham, once separated from APCM, very soon abrogated its “working arrangements” and started cutting prices, further affecting the profitability of the Thames industry. It remained desirable to bring Wouldham and the other local firms with “working arrangements” into the company, but APCM continued in a shaky financial position throughout the first decade of the 20th century and they were in no position to make purchases. It had yet to pay an ordinary share dividend. Osborne spent a lot of time on trying to set up industry-wide price agreements, using an "insurance scheme" structure that got around recently-introduced anti-trust legislation. However, his schemes could not be made to stick. Meanwhile in 1906, Percy Malcolm Stewart set up the Inland Cement Manufacturers' Alliance, designed to set a uniform pricing policy among companies outside APCM. The word “inland” was loaded with meaning – it signified firms who used the railway – not ancient sailing barges – or yachts.
However, late in 1910, 80% of the ordinary shares were bought by the 69 Old Broad Street Group – a consortium of City funders led by John Wynford Philipps. Osborne claims to have been oblivious of the nature of this takeover until it was a done deal, but he was almost certainly responsible for initiating it. The new financiers were prepared to advance large amounts of money in order, once again, to unify the industry. According to one of the least convincing and most self-promoting sections of Leaves, Osborne had sole responsibility for negotiating with them. It was clear that the consortium was only interested in an arms-length investment, but that they would replace the top people in the company. Philipps would take the place of chairman F A White, who became a vice-chairman. Vice-chairmen Osborne and Edmund Wright Brooks stood down, and Philipps’ nominee Ferdinand Stanley took the other vice-chairmanship. Osborne cried crocodile tears about the removal of White, but it was undoubtedly done at his suggestion.
The consortium’s money was used to set up a new company, the British Portland Cement Manufacturers Ltd., as a subsidiary of APCM, the intention being to buy up all the remaining industry, and thus eliminate price competition and improve profitability. The first obvious targets for purchase were Wouldham, the other three “working arrangements” firms and the three that had subsequently dropped out. Wouldham proved easy since by that time, Pearson’s view of the cement industry was even more jaded than Osborne’s, and he was glad to get shot of it. Vavasour Earle, who would have been a problem, had been ousted from Martin Earles, after he had wasted – some would say embezzled - a lot of money trying to sell slag cement patents. Lee’s sold, but cunningly preserved most of the available chalk land. Queenborough was small and virtually bankrupt, as were West Kent. The main directors of Johnson’s were once again given seats on the board, and assurance of new investment capital. Otto Trechmann only sold his obsolete Medway plant, keeping the one at Hartlepool.
As for the rest of the industry, purchases again were substantial, but far short of the objective of complete unification. Only 72% of the remaining Thames/Medway capacity was secured. The small but eventually massive Tunnel might have been bought, but they were beaten to it when FLS bought it in 1911. They bought the Sussex Portland Cement Co. Ltd. and the Stewart group (Norman, Saxon and Sundon), who had been in general agreement with the principle of unification, though not so keen on APCM. Of the rest of the provincial cement industry - i.e. the area that now (2025) supplies 100% of British production – they secured only 42%. Once again, neither the size nor the importance of the area was appreciated, nor was the fact that, while A&BPCM trod water, provincial independents would double their capacity in the next ten years. Osborne set up BPCM as a paper company with a peppercorn capital in early 1911, then purchases were negotiated in almost complete secrecy during the year, and the company was finally launched with £3.5m capital on 22/12/2012, shares being given to vendor shareholders on a nominal value basis. There was no published prospectus.
BPCM now brought Osborne into contact with A C Davis. In the new firm, Philipps was chairman, Stanley and Charles Watson of Johnsons were vice-chairmen, and of ten managing directors, five (Osborne says six) were from APCM (Harold Anderson, Bamber, Layton, O’Hagan and Stevens) and five (Osborne says seven) were from the vendors – Walter Cooper of Penarth, A C Davis of Norman, Harry le Marchant of Martin Earles, P M Stewart of Sundon and Charles Watson of Johnsons. Of the twenty ordinary directors, most were from the vendors. There now emerged a closely-knit group on the board – A C Davis, P M Stewart, Arthus Durose, George Keeble and Halley Stewart (P M Stewart’s father) – who pursued a disruptive agenda. They, and particularly Davis, became Osborne’s nemesis.
In Leaves, Osborne doesn’t mention Davis by name. Davis had become notorious throughout the industry for selling cement from his Norman and Saxon plants at below cost price and for general double-dealing. It’s amusing to see Osborne now “dining with the Devil”. Maybe he saw in him a kindred spirit:
When I was proposing to the committee the purchase of one of the firms who had been the most active in opposition to the associated company, whereby severe losses had been suffered, great opposition and bitterness were shown by those of my colleagues who had felt the lash of such opposition. My proposals included the placing on the new directorate the disliked man. Some of our sales directors called the man a devil” (Note 35), and said they would not sit at the same board with him; but I had formed a high opinion of the abilities of the man, so I said ‘better for the devil to be chained to our board-room table than have him running around wild’. The works were purchased, the man became a managing director of the British company, and is one of the prominent directors to this day” (Note 36).
But Osborne (he claims) noticed a change in the atmosphere:
I began to feel that a section of the board desired a complete change in the management of the company and were working with that end in view. The influence of this group became so strong that at the end of five years I did not wish the associated company to re-elect me to the board of the British company” (Note 37).
After a short period of consolidation, the combined companies became considerably more profitable, and in 1913, APCM for the first time issued a dividend on its ordinary shares.
During the war, Osborne paid for the fitting of Ingress Abbey (which belonged to APCM but was not in use) as a military hospital. He provided the money, but was unable to give it his personal attention, and the organisational work was done by APCM people, under the direction of Bamber. The railway access that he said he also provided was in fact built in 1906 for the Ingress Abbey Paper Mills. He also had one of his motor-cars fitted out as an ambulance.
The World War naturally had a negative effect on A&BPCM, and dividends were reserved, but both firms, and particularly BPCM, continued strong and emerged with confidence in 1918. But Osborne was becoming marginalised:
The war was over, and a very important question of policy was decided against my most vigorous protests, by an overwhelming majority, which showed me how I had lost my hold on my fellow-directors” (Note 38).
The question at issue, as presented in Leaves, and subsequently repeated ad nauseam by other writers who relied upon Leaves, was whether there would or would not be a “post-War boom”. The up-tick in demand was indeed short, mainly because post-war inflation in continental Europe made exporting of cement – as for many other British products – almost impossible. Foreign economies were too poor to buy, while their exports were too cheap to compete with. However, the real policy question was whether, regardless of the market, the companies’ plants should be brought up to date. This meant facing up to the obsolescence of the huge plant investments made initially by APCM – clearing them out and replacing them with new plant of mature technology that would this time have a reasonable working life. Not so clearly expressed – but obvious to Osborne – was the tacit intention to clear out the old lags who had made those decisions 20 years earlier, Osborne included. Percy Malcolm Stewart, with the backing of A C Davis, was the spearhead of this movement.
According to Osborne, he rendered the companies a “last great service” (Note 39). Pearson’s, having sold Wouldham to BPCM, retained land on the Essex side of the Thames for developing an oil terminal – the oil business being the most lucrative part of Weetman’s portfolio. However, in 1919, he sold most of his Mexican oil interests to Shell (forming Shell-Mex), rendering the Thames-side land redundant. Osborne claims that Pearson sent for him and told him that “he and his associates” had decided to spend a million or more of his oil money to erect a modern and up-to-date cement plant, turning out 1000 tons per day, on the land. After two or three hours of argument, Osborne (he says) persuaded him not to go ahead. If this happened at all, it was probably an elaborate joke concocted by Pearson. The idea that Pearson would propose such a scheme at any time, let alone in 1919, when the much larger Kent plant (not mentioned in Leaves) was already under construction on the Kent side, is patently absurd. However, Pearson, with difficulty keeping a straight face, could easily have pulled it off as a joke, guaranteed to get an apoplectic reaction from Osborne. Needless to say, there is no mention of any scheme remotely like this in the Pearson Archive.
Osborne insists that he was intending to resign from APCM, but in the end, he was dismissed, with a small compensation payment, along with others of the old guard. On 16/7/1919, APCM and BPCM were reorganised into a joint management structure, and Osborne, J B White, E W Brooks, H E Brooks, and G M R Layton, along with thirteen ordinary directors were forced out in order to “facilitate concentration of management”. This left as managing directors Stanley, Harold Anderson, Bamber, Alfred Brooks, Davis, Stevens, P M Stewart and Anthony White. Affronted, he said:
I could describe myself as having been snuffed out, with no consideration for all I had done for the companies.
and
From the date of my retirement I have tried as much as possible to shut out all thoughts of cement, for I have no pleasure in looking back on any of the years in which I had struggled for it.
and
I have felt no pleasure in writing about cement, but it had to be done.
After he had left, a further reorganisation took place in 1924, following an abortive hostile takeover by Henry Spence Horne, after which Percy Malcolm Stewart and Arthur Charles Davis were firmly in control. Stewart, in his first AGM speech on 8/4/1925, said all the things that were previously unsayable. “Diffident as one is to refer to the past”, he quipped, and proceeded enthusiastically to refer to the past at great length, listing in forensic detail all the faults in the establishment of APCM mentioned above. There was no one left to gainsay it. If Osborne read an account of this, he doesn’t mention it in Leaves.
Retrospectively, Osborne made a bad decision by involving himself with cement. Such industries as tramways and breweries had a steady and growing demand, but cement was, and has always been, subject to market fluctuations of much greater amplitude than the general business cycle, making effective investment decisions far more difficult than Osborne could cope with. The people who ousted him were much better at it.
Osborne had to a large degree already retired to his villa at Roquebrune after the formation of BPCM in 1912, and conducted most of his increasingly infrequent and truculent exchanges with the boards by telegraph. Finally, in 1919, he settled down to an existence of entertaining in the sun, getting fatter and goutier, until his death on 3/5/1930, at Roquebrune. The probate register gave his address as River Home, Hampton Court, and his effects were assessed at £243,571 19s. 10d.
Coins, Yachts, Villas and Actresses
During his heyday, Osborne enthusiastically engaged in conspicuous consumption. His collection of ancient coins was world-famous. His final sale of the collection gets little mention in Leaves, and one must assume that it was gathered largely as an investment. He sold it in 1908 at a time when he was low on liquidity. A much more serious leisure activity was sailing around Europe in his yachts. He says he had three, but one of those was probably the Prince of Wales’ sailing yacht, which he bought speculatively and immediately sold on. Two yachts are ascribed to him in Lloyd’s Register:
It would appear that he sold the latter at another moment when he was hard up. Until then, he had used them as an entertaining and schmoozing aid. By 1905, his permanent residence in the South of France had been built, and since this could be reached from London in less than 24 hours in 1905, the villa became his entertainment centre.
His residences were many. The family, when they moved to London, set up in progressively more desirable addresses in Kensington. In 1881, he bought a lease on River Home - a rather substantial “cottage” on the river bank close to Hampton Court, intended for weekend relaxation. He extended it over the years, bought the freehold and made it available to his mother and sisters; his son inherited it.
At the latest by 1887, he bought the lease of a set of rooms at the Albany (Note 25). This apartment, he insists, was not one of the small sets at the rear – it was a large apartment in the main house. Here he had the services of a well-stocked bar and a maître d’hôtel. It was within walking distance of the City, and he used it for his more leisurely business meetings, and as a dormitory for his London office.
In the 1883 he also bought a large bungalow in Birchington, on the north shore of the Isle of Thanet. Dante Gabriel Rossetti had died while visiting there in 1882, and Osborne called it Rossetti Cottage. In the 1890s, he used it as an embarkation point for his yachts, which were anchored offshore. The house stayed in the family. It was demolished in 1966.
He also had a house near Dartmouth, used by his family as a holiday location.
In 1904, he had the Belle Époque villa Casa del Mare (Note 40) built by architect Hans-Georg Tersling, who had built prominent buildings in Montecarlo. Situated adjacent to the beach at Roquebrune, midway between Montecarlo and Menton, it was excellent for entertaining large numbers of guests with concerts featuring famous musicians and opera stars. Osborne spent increasing amounts of time there from 1912 onwards, and died there in 1930, after which it was sold. Many prominent people owned it subsequently, including the Italian film producer Dino De Laurentiis. From 1991 to 1997, it belonged to Mobutu Sese Seko, the President of Zaire. In 2024 it was confiscated by the National Jurisdiction for the Fight Against Organised Crime of the Paris Prosecutor's Office. At that time, it was valued at €23m.
His concert-giving was a natural development from his earlier interest in theatre. His involvement in the 1885 divorce case included, inter alia, a liaison in a box at the Empire Theatre, Leicester Square. Between 1876 and 1879 he financed several theatrical productions, mixing convivially with many producers and predominantly female artistes, giving great scope for name-dropping and interminable anecdotes.
About three or four years of theatrical experience was all I wanted – they cost me dear (Note 41).
His obituary in The Times coyly remarks:
At one time he was interested in rescue work, but was driven to include this particular activity among his failures.
His account of this in Leaves indicates that he was somewhat selective in those he chose to “rescue”, going for what the Pre-Raphaelites would call stunners – and they saw him coming, as it were. Musing on the nature of love in the last few chapters of Leaves, written in the comfort of Roquebrune and Baden Baden, he reflects that “my own married life was not a happy one”, this being just about his only mention of his wife, Bessie, from whom he was estranged after a few years of marriage. He evidently looked after her in a small way. She died in 1940 at the Hotel Metropole, Brighton, leaving £9,659 to their “adopted” daughter Gladys.