It must have been quite an experience to live on the Island in the middle of the 19th century. Just imagine what it was like to be living in a place that was developing and changing so much that – in the few years from 1850 to 1865 – you could witness the following:
- Opening of the pubs The Newcastle Arms, Tooke Arms, Great Eastern, The Queen, Vulcan, Magnet, Ironmongers’ Arms, The Ship, Lord Nelson, Torrington Arms, Manchester Arms, Prince of Wales, London Tavern, The George, Princess of Wales, North Pole (first as beer house), Pier Tavern, Cubitt Arms, Dorset Arms, Builder’s Arms
- Establishment of the Island firms Samuda Brothers iron and steel shipbuilding, John Stewart’s Blackwall Iron Works, Cumberland Oil Mills, Joseph Westwood and partners at London Yard, Thames Ironworks and Shipbuilding Company, Samuel Cutler’s Providence Iron Works, John Lenanton’s timber firm, Binks Brothers in Strafford St.
- Start of construction of the Millwall Docks and The Great Eastern, and the go-ahead given for the Millwall Extension Railway as far as Johnson St in the south of the Island.
- Opening of Christ Church, St. Paul’s Church, St. Luke’s iron church, Primitive Methodist Church
- Construction of a new police station on Manchester Rd.
- Building of shops and houses in the newly-created Cubitt Town.
But then, abruptly, all that well-being and growth came to an unexpected and disastrous halt. On 11th May 1866 (a day that became known as Black Friday), the London bank and discount house Overend, Gurney & Company collapsed owing about 11 million pounds (equivalent to £1 billion today).
The bank’s collapse contributed to panic and loss of confidence in financial institutions on an international level. In Britain, the bank interest rate rose to 10 per cent for three months and more than 200 companies, including other banks, failed as a result. Unemployment rose sharply to 8% and there was a subsequent fall in wages.
Due to an unfortunate combination of factors, the impact of the recession on the Island and on Islanders was particularly bad. The Island’s expansion boom of the previous years was based on over-extended credit, and the rise in interest rates crippled many companies and ventures. Even more catastrophic for the Island was that many shipbuilding and other riverside companies had borrowed directly from Overend, Gurney & Co. (ships, shipbuilding and railways were the investment flavours of the day).
Building on the Island came to a virtual standstill in 1866. An 1871 map shows how housing development had stopped. Millwall and Cubitt Town streets had not extended as far as planned, and many streets in Cubitt Town had large gaps in them, with undeveloped plots. A decade would pass before building started again.
Newspapers of the time provided extensive descriptions of the conditions on the Island.
The stories of individual suffering were sometimes graphic and heartbreaking.
But, despite all evidence to the contrary, there was some belief among the better-off that the Islanders had only themselves to blame. It was the fault of the unions that firms were closing – strikes and unreasonable pay demands were making it impossible to do business. One such example, a newspaper letter sent by someone who named himself ‘A Country Guardian’.
Fortunately, however, not everybody saw it that way.
The distress caused by the slump of 1866–7 was so great, however, that widespread interest and sympathy was aroused. The Times reported that the recession in the shipbuilding industry was such that it amounted to almost temporary extinction’ and that far too much labour had been brought into the area during the ‘bubble period’ than could be found employment in normal circumstances. The plight of the many unemployed was advertised in the newspapers, and local businessmen set up the East End Emigration Committee to arrange free passages to North America for the jobless and their families.
– British History Online
The dock companies and their business were not noticeably impacted by the economic crisis. Those who worked in the docks escaped relatively unscathed from ‘the distress’.
It was several years before investment in manufacturing in the area revived, but shipbuilding never really recovered. It found its home in cheaper and more practical locations.
The failure to complete Cubitt Town as envisaged by William Cubitt meant that the Island never had anything like a middle class. Houses designed for better-off families could not be sold, and were occupied by multiple working families (frequently one family per room). They were poorly maintained, prone to flooding, and were slums in no time. According to British History Online:
The crash of 1866 brought house-building to a sudden halt. Moreover, emigration from the area resulted in large numbers of empty houses, particularly on the Isle of Dogs, where there were almost 800 empty dwellings in 1868, approaching a half of the total. Although an economic revival followed the slump of the late 1860s, the Island was not well placed to benefit from it and there were still 262 vacant houses in 1871. In such circumstances, building took some time to resume and the developments which were proposed either failed to attract investment or took a long time to get under way. Land prices fell considerably in the aftermath of the crash and some sites did not attract purchasers.
The directors of Overend, Gurney and Company were tried at the Old Bailey in 1869 for fraud based on false statements in the prospectus for the 1865 offering of shares. However, the Lord Chief Justice Sir Alexander Cockburn said that they were guilty only of “grave error” rather than criminal behaviour, and the jury acquitted them. The advisor was found to be guilty. Although some of the Gurneys lost their fortunes in the bank’s collapse, the Norwich cousins succeeded in insulating themselves from the bank’s problems, and the Gurney bank escaped significant damage to its business and reputation. Deja vu, anyone?
London also suffered a major cholera outbreak in 1866, killing 5000.
In 1878 a terrible storm led to flooding on the Isle of Dogs, and another appeal to peoples’ charity to help the Islanders in distress (that’s a whole story in itself).
Perhaps it was not such a good time to be on the Island after all.