290 Chapter Eight1888, for example, responding to urgent solicitation from the Admi
ralty to bid on a contract for armor plate. But Vickers’ decision also re
flected the firm’s mounting difficulty in matching American and Ger
man steel prices on the civilian market. By moving into armaments
production, Vickers successfully insulated itself from foreign cost
competition, since the Admiralty was not interested in buying arma
ments from any but British suppliers.^48
With costs so unpredictable on both the private and the public side,
the reality of competition and open bidding diminished rapidly. New
firms like Vickers quickly learned how to cooperate with Armstrong
and other established arms makers. To be sure, a new patent might
permit the entry of another firm into the arms trade; but such com
panies regularly confronted financial crisis once initial contracts had
been fulfilled since new orders were usually not forthcoming on a
scale to keep their capital plant busy. Under such conditions, the uni
versal response was to amalgamate with older arms makers and form
corporations whose financial and technical resources then would allow
managers to spread risks within the firm by shifting men and ma
chinery from one to another contract as the needs of the Admiralty
(and foreign sales) might dictate.
Such firms, when they became big enough, assumed many of the
characteristics of a government bureaucracy. Being in a monopolistic
or at least quasi-monopolistic position with respect to capacity for
making complex armament items, they could bargain on more or less
even terms with Admiralty purchasing agents, who, increasingly, had
nowhere else to turn when they sought to buy highly specialized (and
often secret) new kinds of equipment. Private arms makers, in other
words, came more and more to resemble the Woolwich arsenal, with
the difference that the navy and their suppliers were accustomed to
live with far more radical technical changeability than anything that
had yet descended upon the army and the arsenal.
How rapidly amalgamation of British arms firms occurred may be
illustrated from the history of the Maxim Gun Company. Having been
established to make machine guns in 1884, it merged, just four years
later, with the Nordenfeldt Company. Then the Maxim-Nordenfeldt
Company was bought out by Vickers in 1897. Armstrong, too, en
tered upon a series of mergers, the most important of which was the
acquisition of Whitworth’s, its long-standing rival, in 1897. By 1900,
therefore, two big firms, Vickers and Armstrong, dominated the busi
ness of heavy armaments in Great Britain. Each dealt with the Admi-
- Scott, Vickers, pp. 20, 42.