Edward Cecil Guinness, First Earl of Iveagh 1847-1927

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A Biography by Tom Corran

Edward Cecil Guinness, First Earl of Iveagh 1847-1927

Edward Cecil Guinness was born at St Anne's Clontarf, County Dublin on 10 November 1847, the youngest of three sons of Sir Benjamin Lee Guinness (1798-1868) then the proprietor of the St James' Gate Brewery in Dublin, and his wife Elizabeth Guinness (d 1865), third daughter of Edward Guinness of Dublin. Edward Cecil was privately tutored at home, attending no school, before studying at Trinity College, Dublin where he took an ordinary BA with special merit in October 1869.

On the death of his father in 1868, Edward Cecil had hurriedly joined the management of the family brewery, receiving a general introduction to all aspects of the business, technical and financial. At first the brewery was jointly run by Edward Cecil and his eldest brother Arthur (created Lord Ardilaun in 1880), with the help of an established, highly-competent and professional management which had served their father, but gradually Arthur move out of business and into politics, particularly in Dublin and London. From the 1870s onwards Edward Cecil increasingly ran the brewery by himself, with Arthur as a sleeping partner, and eventually Arthur was bought out in the early 1880s.

In 1868 the average output from the brewery was in the region of 350,000 bulk barrels, produced from a single brewhouse and primarily sold in Ireland although with a small and growing trade in England. The main product was stout in a variety of forms. Annual profits were running at about œ120,000 on average, and much of this was being ploughed back into the business to build up capacity. At this time the UK beer market was undergoing a particularly significant upheaval; after almost a century in which porter had been the dominant product of the large producers, ale, particularly from the new giants of the trade, the Burton brewers (Bass and Allsopp), was sweeping all before it. The consumption of porter appeared to be in terminal decline, and increasingly London brewers were switching their own production, and capacity, away from porter towards ale. To what extent this was the opportunity that Guinness required and to what extent they simply wiped out the opposition is not clear. Not all events over the next twenty years the UK market for dark beer, porter and stout, was usurped almost entirely by Guinness alone. By 1875 Guinness's annual output had reached 725,000 bulk barrels, and by 1886 some 1.2 million bulk barrels, thus making the brewery the largest single producer not just in the British Isles but in the world. This had been achieved primarily through explosive growth in England. Partly this was a result of narrowing its product range: from 1870 onwards only three different varieties were produced, each for a specific market - porter for Ireland, Extra Stout for Britain, and Foreign Extra Stout for the rest of the world. Targeted varieties were followed by a more targeted approach to marketing, wholesaling and retailing the brand. After decades of reliance on selling at arm's length through independent wholesalers and bottlers in the UK, Guinness now exerted a more direct influence and were prepared to set up their own agencies if necessary. The thought of such direct competition and the growing success of the brand rapidly encouraged mainland based brewers to seek the agency for Guinness in self-protection. So increasingly Guinness's own success fuelled its system and motivated its agents. By the 1880s Guinness was firmly established as a brand, great advantage having been derived from the 1875 Trade Mark Registration Act in protecting the familiar buff coloured label with its harp motif. From that point on, the brand became increasingly reliable, identifiable and unique. That uniqueness was probably a prime factor in its success, and was certainly an aspect of the brand which the company fought hard to protect.

The rapid expansion in output was achieved through a concomitant expansion in the capacity of the brewery itself. The first brewhouse was doubled in capacity in 1870, and the subsequent decade saw a new brewhouse in 1876, and the doubling of the old site by the purchase of new land between St James's Street and the River Liffey which allowed considerable extension to the existing facilities. By 1886 the site covered some 42 acres, supported by a fleet of barges running beer from the brewery to Dublin port. Between Edward Cecil's arrival and 1886 over œ1 million was spent on capital projects, financed entirely from retained profits. By the mid-1880s the brewery had a 6 per cent share of the total UK beer market (probably, but not certainly, the largest of any company) and was generating profits of around £450,000 a year.

Effectively all this had been achieved under the proprietorship of Edward Cecil who was certainly the driving force and motivator behind the company from 1868 to 1886. His lieutenants were important, and Edward Cecil consistently chose extremely able men to work for him. The key man was J T Purser, inherited from his father's proprietorship in 1868, who continued as general manger of the brewery until 1886; Purser was probably responsible for the daily administration of the whole business until incorporation in 1886. Geoghegan, head brewer, was, however, another and was in part directly responsible, with Edward Cecil's encouragement, for the technical and scientific development of the company. This culminated in the Guinness Research Laboratory set up in the 1890s and the steady evolution of Guinness's into the industry's most technically and scientifically enlightened brewery by the early Twentieth Century - with research including detailed work on raw materials as well as fermenting science. While these professional managers undoubtedly played a vital part in the growth of Guinness's the primary credit still must be given to the proprietor who oversaw the whole enterprise.

Edward Cecil had briefly considered the sale of the business to the public in 1880 which would have allowed the family to realise some of their massive investment and would also have freed Arthur from the partnership agreement without the complex negotiations which were finally necessary. A meeting with Lord Rothschild was held in 1880, but the response from the banker was, at best , lukewarm and so the idea was dropped. In 1885 the idea was raised again, this time with Lord Revelstoke of Barings and progress was made. Revelstoke seems to have had a lower opinion of the value of the business than the family; Barings wanted to sell for less than a total capitalisation of £5 million, but Edward Cecil stood out for a price tag of £6 million, which was finally, though reluctantly, accepted. The sale went ahead in 1886, and was 20 times over subscribed, the shares of Arthur Guinness & Son & Company Ltd rising to a 60% premium their first day of trading. In fact, a majority of the shares never went on public sale at all, as the merchant banks and family between them took a controlling interest from the start. Edward Cecil started with a significant minority holding but gradually bought his way back to a controlling stake again over the remainder of the 1880s. At first Edward Cecil was both managing director and chairman of the company, but it had always been his intention to step down from direct management as soon as possible and his period as managing director until 1889 was really little more than a guarantee to the investors that the family would continue to run the company despite the increasing reliance on professional managers in day-to-day operations. He was succeeded as managing director by Claude Guinness, although on the sudden death of Claude he did return to the position for a short time in the 1890s until a permanent successor could be found. He remained chairman and was very active until the First World War. Thereafter he was more of a figurehead (albeit one with the firmest views which were not lightly dismissed) until his death. The first publicly-declared profits after floatation were £543,000 in 1887, but growth continued rapidly thereafter, and profits reached £1,125,202 in 1913 and £2,175,816 in 1919. Equally volume produced rose steadily, mostly as a result of a burgeoning export trade and even greater penetration of the British market to 3 million bulk barrels a year around the time of Edward Cecil's death.

Although he remained closely in touch, and in distinct control of the company after 1900, the history of the company from around that time probably owed considerably less to his own abilities and initiative than to those of his carefully chosen professional managers who effectively ran the company for him. The major achievement of his business career might reasonably be said to have been completed by then, his chief monument being the conversion of Guinness from a provincial brewery of some influence to the largest and most influential brewer in the British Isles by 1900. This was marked when the newly-formed Brewers' Society in 1904 offered the chairmanship to him; although he refuse, he did accept a life position as honorary vice-president. He did not believe in involving either himself or his company in trade politics; nevertheless Guinness's was a founder member of the Brewers' Society. A measure of Edward Cecil's success was that under his control Guinness's market share in the UK rose from around 3% to well over 12% on his death, which represented a dominant position in Ireland and virtual domination of the dark beer market in England and Wales. Edward Cecil was never as active politically as other members of the family, such as his brother Lord Ardilaun, but he took a close and abiding interest in local social affairs. He was elected High Sheriff of Dublin City in 1876, and of County Dublin in 1885. This period also coincided with the first of his gifts to the two cities where he lived. In 1889 he donated £250,000 to social improvements in London and Dublin, and later a further £250,00 to the Bull Alley Clearance Scheme in Dublin. In 1907 the Iveagh Markets in Dublin were opened, named after him in recognition of his generous sponsorship of the scheme. These were just the largest and most publicised of his many similar donations to both cities. In recognition of his public work he received a steady flow of public honours; in 1885 he was created baronet, in 1891 (conveniently after his official retirement from direct involvement in business) he was created Baron Iveagh of Iveagh in County Down. In 1905 he was made Viscount Elvedon (named after the country house Elvedon Hall in Suffolk which he had just bought) and finally in 1919 he received an earldom, taking the title First Earl of Iveagh. He interested himself in academic and in scientific matters. He donated œ250,000 to the Lister Institute of Tropical Medicine. He was elected Chancellor of Trinity College, Dublin in 1908. He received a special address of thanks from the City of Dublin in 1909. Other honours included the Knighthood of St Patrick (1896), the GCVO (1910) and FRS in 1906. In 1925 he rescued Ken Wood House for the nation, filling it with a large part of the remarkable private collection of pictures he had built up since the late 1880s on the proceeds of the business. On his death in 1927 the whole house and its collection were granted intact to the Nation in a bequest.

In retrospect his contribution to the brewing industry was immense in two ways, He demonstrated that even in the late Nineteenth Century there remained many opportunities to build up a brewery to national size. In that respect Guinness's was and is his prime monument. The rate of growth of the company finally outstripped that of Bass and Allsopp, and was the wonder of the period. His social pre-eminence did much to build up the public image of the Guinness family which in turn contributed the standing of the brewery itself, but that was not something in which he was actively concerned. While he rose rapidly to the greatest prominence as a businessman and a philantropist in the period after the floatation Guinness's in 1886, there can be little doubt that his major achievements lay in the period leading up to that. In 1886 he demonstrated that the public would clamour to buy shares in breweries and that the stock market was a potential route to urgently-needed capital funding for the industry. Ironically, Guinness's needed that funding far less than most of its competitors. However, Guinness in 1886 set off a spate of such flotation and ultimately that alone, with its injection of vast capital resources into the trade, and the resultant rush for property, changes the face of the British brewing industry. Guinness's offer for sale in 1886 thus started the race for capital and property which, alongside the fall in demand for beer ultimately contributed to a major concentration of the industry in the early Twentieth Century.

Edward Cecil married Adelaide Maud Guinness in 1873, a distant cousin, and daughter of Richard Samuel Guinness of Deepwell House, County Dublin. They had three sons, one of whom, Rupert succeeded both to the title and to the chairmanship of the company in 1927. Lady Iveagh died in 1916. Edward Cecil himself died in London on 7 October 1927 leaving £13.486 million gross.

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