The Grand Allies, or Grand Alliance, was a cartel of English coal-owning families formed in 1726. It was based on the Northumberland and Durham Coalfield, and played a major role in the economics of mining coal from the field for about a century. Over time, other families joined the original main three.
Early period
Up to around 1700 a guild, the Hostmen of Newcastle upon Tyne, had an effective monopoly of the coal trade locally.[1] After a decline in the control of the Hostmen, "combinations" of coal owners vied for advantage.
The Political State of Great Britain in 1740 commented:
[...] the Gentlemen who by some are call'd the Grand Allies, expended in [their collieries] above Fifty Thousand Pounds, besides Seventy or Eighty Thousand Pounds more in laying Waggon-Ways, building Steaths, &c.[10]
It was a transitional time for coal production in the area. The collieries north of the Tyne and west of the River Ouseburn, from 1700 to 1730, largely produced "landsale" coal consumed locally, rather than "seasale" coal exported down the Tyne. There was then a change, and by 1770 a number of new, technologically more advanced mines north of the Tyne had been opened, in competition for the seasale trade with those south of the Tyne. One at East Denton, a Grand Allies property, was "won" just before 1770, at a high rent.[11]
Monopoly and dead rents
There were two main aspects to the cartel: manipulation of coal output, and pooling of capital.[12] "Regulation", or restriction of output of coal to support the price, had already been used earlier in the century, was employed intermittently, and had only partial success;[13] Sidney Wortley Montagu, who died in 1727, had previously been, from 1709 to 1716, in the "Regulation" of five major coal-owners that broke up acrimoniously.[14][15]
Another side of the first aspect was the use of "dead rents": the deliberate keeping out of production of collieries on which rents were being paid.[16] The Grand Allies applied dead rents strategically, for long periods, for example to St Anthony's Colliery at Byker.[17][18] They were also accused of building staiths simply to deny the chance of others doing so on the waterfront.[19]
From 1770
The period to 1770 was one in which the Grand Allies had a clear regional dominance. In the second quarter of the 18th century, of nine collieries opened in the north-east, eight were controlled by the Grand Allies.[20] During that time coal mining spread into the area between the River Team and River Derwent, tributaries flowing north into the Tyne.[1]
That degree of control fell away, because of technical advances but also because the banking system enabled new entrants to finance coal mines. From the end of the Seven Years' War, there was growth in private banks, and improved steam pump technology, key to exploiting mines that previously not been viable.[21][22]
After the near-monopoly on local coal for the Grand Allies waned in market importance, the "Limitation of the Vend" coal producers' organisation succeeded it in keeping prices high in a more developed cartel structure, with production quotas.[26][27] The advent of the steam locomotive and the pioneering Stockton and Darlington Railway were directly connected to the concentration of Grand Allies pits around Killingworth (see Killingworth locomotives).[28] The long-term effect of the development of railways was then to reduce the importance of the Northumberland and Durham coalfield, because it provided a logistical solution for the transport to London of coal from other areas.[1]
^Flinn, Michael Walter; Stoker, David; Church, Roy A. (1984). The History of the British Coal Industry: 1700-1830, the Industrial Revolution. Vol. II. Clarendon Press. pp. 41 and 257. ISBN978-0-19-828283-9.
^Flinn, Michael Walter; Stoker, David; Church, Roy A. (1984). The History of the British Coal Industry: 1700-1830, the Industrial Revolution. Vol. II. Clarendon Press. p. 40. ISBN978-0-19-828283-9.
^Flinn, Michael Walter; Stoker, David; Church, Roy A. (1984). The History of the British Coal Industry: 1700-1830, the Industrial Revolution. Vol. II. Clarendon Press. p. 259. ISBN978-0-19-828283-9.