5. Depression and mechanization
5.3 Rationalization measures
their colleagues in Parliament and protest against planned downsizing measures.
This, for example, was the case in Charlottenberg, where the Tobacco Monopoly manufactured chewing tobacco and snuff. Ideas about shutting down production at this location were met with protests from local politicians on several occasions and the Charlottenberg factory remained until 1941.19 Similar protests were also heard from other places where tobacco production was threatened and there is some evidence of how the company took regional considerations into account when allocating production.20
Besides concentration, economies of scale may also be attained by standardization of products. Before nationalization, the number of different tobacco brands was huge. One of the first measures taken by the management was to limit the range, but there was no consistent standardization tendency during the following years. The number of cigar brands was halved between 1916 and 1920. In the latter part of the 1920s, the range started to become more varied again and in 1940 the number of cigar brands was exactly the same as it had been in 1916. It is only for chewing-tobacco and snuff that we can speak about a clear standardization trend.21
5.3.2 Mechanization
The biggest potential for labour-saving technological progress in the Swedish tobacco industry at nationalization was in the production of cigars and cigar-cigarettes; the branch which employed the greatest number of workers and where most tasks were performed manually.22 The need and potential to
19 SM, STM, Styrelsens protokoll, 31 August 1917; SM, STM, Styrelsens protokoll, 25 April 1933;
SM, STM, Styrelsens protokoll, 28 June 1933. In 1919 the management even decided to move chewing tobacco from Malmö to Charlottenberg. SM, STM, Styrelsens protokoll, 10 March 1919.
20 SM, STM, Styrelsens protokoll, 18 November 1918; SM, STM, Styrelsens protokoll, 18 March 1929; SM, STM, Styrelsens protokoll, 21 December 1931; SM, STM, Styrelsens protokoll, 13 June 1934. The company was critiziced by the auditors in 1927 for not having concentrated production enough. af Trolle 1965, p 33.
21 See table in af Trolle 1965, p 362.
22 Historian Lars Olsson has expressed a somewhat different opinion regarding the technological level of cigar manufacturing in Sweden; stating that this branch was mechanized during the latter part of the nineteenth century. This statement is dubious since it is based on sparse information from the official industrial statistics on machines and patents. As is well known, patents do not necessarily indicate that the technology is actually in use. Furthermore, Olsson is not fully clear in his own judgements as he
mechanize this branch were already acknowledged in the spring of 1915, before the company began its production, when Wallenberg informed the board that four cigar machines had been bought in Berlin and that 50 hand-driven machines for bunch making had been ordered from a domestic firm.23 However, these investments did not matter much for production at large and it would take five years for a more sweeping mechanization of cigar and cigar-cigarette production to begin. In 1920 the company ordered 80 ‘fresh-work’ machines for cigar-making from the United States, of which most were delivered and installed the following year.24 Contemporaries described the machine as “almost human” but its production capacity was certainly far beyond that of manual work.25 While a hand worker could produce about 35 cigars per hour, the machine could produce 400 per hour.26 Since each machine was operated by three workers, labour productivity was almost fourfold. In addition to cigar-machines, the company bought “a great number” of machines for making cigar-cigarettes from the Swedish company Formator.27
The timing of events is interesting. It took some years of increasing demand before the management began to make serious investments in labour-saving technology. This was probably partly because of the disrupting effects of World War I, but there was also a degree of uncertainty about the actual potential of the new technology in this phase, as will be further discussed in chapter 7. When the decision was eventually taken, a deep recession was imminent. Nevertheless, the management acted according to plan. No attempt was made to stop the deliveries and to postpone mechanization, as had been the case with the import agreement.
By the autumn of 1924, about 65 percent of the cigars and 88 percent of the cigar-cigarettes sold by the company were machine-made.28 Possible doubts also writes that the technology used for making cigars in the early twentieth century can hardly be regarded as “machine production in its proper sense”. Olsson 1980, pp 119-122.
23 SM, STM, Styrelsens protokoll, 23 April 1915.
24 See Aktiebolaget Svenska Tobaksmonopolets verksamhet år 1920: Styrelsens förvaltningsberättelse;
Aktiebolaget Svenska Tobaksmonopolets verksamhet år 1921: Styrelsens förvaltningsberättelse.
25 Manning & Byrne 1932, p 1.
26 af Trolle 1965, p 39.
27 af Trolle 1965, p 39.
28 These estimations have been made by combining information in an internal memo and the annual report for 1924. SM, STM, Styrelsens protokoll, 23 September 1924, Bilaga E, ”Maskiner”;
Aktiebolaget Svenska Tobaksmonopolets verksamhet år 1924: Styrelsens förvaltningsberättelse. The degree of mechanization in the Swedish tobacco industry appears to have been comparatively high in
about the new technology were gone.29 The management saw a number of advantages of mechanization in addition to its labour-saving and deskilling effects, for example: better hygiene, more even production, greater work discipline, less consumption of raw tobacco, book-keeping, supervision and reduced space requirements. Furthermore, the management thought that machines would imply greater flexibility, making it possible to adapt production to demand swings.30 By 1928, the production of cigar-cigarettes was fully mechanized whereas there were still some cigar brands that were made by hand.31 Over the course of the decade, machines for parts of the preparation work were also introduced.32
As will be further described below, the production of cigars and cigar-cigarettes may roughly be divided into two steps: preparation work and the making of the actual cigar.33 Initially, technological change mainly affected the latter part of the process. Although machines for stemming tobacco leaves existed in some countries in the late nineteenth century, preparation work was generally much harder to mechanize than bunch making and rolling. For a long time, there were doubts about whether it was possible at all. It was thought that raw tobacco was too fragile and expensive to be handled by machines.34 In comparison with machines for cigar and cigar-cigarette making, the early stemming machines were not as labour-saving. At best they could do the job of two manual stemmers and they were not suitable for all grades of raw tobacco.35 The Tobacco Monopoly introduced some stemming machines in 1920s but the great advance in this respect was not made until the 1930s.36
In contrast to cigar-making, machines were already important for parts of cigarette production in 1915. Fed by manually prepared raw tobacco, machines this phase. Only about 18 percent of the cigars produced in the United States in 1926 were machine-made. Cooper 1987, p 311.
29 SM, STM, Styrelsens protokoll, 23 September 1924, Bilaga E, ”Maskiner”.
30 SM, STM, Styrelsens protokoll, 23 September 1924, Bilaga E, ”Maskiner”.
31 In the annual report for that year the company board noted that it was, “out of consideration for the employed”, not possible to reduce the number of cigar workers as much as motivated by the degree of mechanization. Aktiebolaget Svenska Tobaksmonopolets verksamhet år 1928: Styrelsens förvaltningsberättelse, p 24.
32 af Trolle 1965, p 39.
33 See subsection 5.4.1.
34 af Trolle 1965, p 89.
35 Manning & Byrne 1932, p 33.
36 af Trolle 1965, pp 39, 89.
could manufacture cigarettes both with and without holders. Machines for cigarettes with holders had a capacity of 50 to 60 cigarettes every minute.
Machines for cigarettes without holders could produce about 300 per minute.
The most important technological advances in cigarette production were the introduction of machines for packaging in 1917 and the mechanization of preparation work in the 1930s.37
As with cigarettes, snuff production was an area where some considerable technological progress had already taken place before 1915. The work in snuff production was heavier than work in other branches, but at the same time relatively simple. Improvements continued after nationalization and machines had been introduced for all tasks by 1930.38
The manufacturing of smoking and chewing tobacco involved a lot of manual preparation, which was hard to replace with machines. Some machines for packing were tried out in the 1920s but not very successfully. There was thus little technological change in this branch.39
5.3.3 Increased labour productivity
Taken together, the rationalization efforts at the Tobacco Monopoly resulted in increasing labour productivity. In comparison with productivity growth in the Swedish manufacturing industry, the tobacco industry was well above the average.40 From 1924 to 1936 output per working hour increased by 94 percent in tobacco production whereas the average for the manufacturing industry as a whole was 41 percent.41 Productivity growth in the tobacco industry was remarkably rapid and in contrast to that in many other industries, associated with a reduction in the absolute number of workers employed.42 Until 1920, the most rapid development was seen in cigarette production.43 As the machine investments shifted focus, productivity growth was the highest in cigar and cigar-cigarette production, where output per worker increased by 94 percent in
37 af Trolle 1965, pp 39-40, p 89.
38 af Trolle 1965, p 40.
39 af Trolle 1965, p 40.
40 For a discussion about the comparative development of productivity in the tobacco industry in the early twentieth century, see Zitzewitz 2003, Hannah 2006a and Hannah 2006b.
41 Rationaliseringsutredningens betänkande. D. 2, Verkställda undersökningar 1939, p 61.
42 Rationaliseringsutredningens betänkande. D. 2, Verkställda undersökningar 1939, p 62.
43 Marcus 1924.
Table 5.1 Index of output per worker in the Swedish tobacco industry, 1919-1941 (1919-1920 = 100)
Years Cigars Cigarettes Rolling tobacco
Chewing tobacco
Snuff
1919-1920 100 100 100 100 100
1929-1931 194 183 146 88 112
1939-1941 235 357 145 85 115
Note: ‘Cigars’ include cigar-cigarettes. Output measured in tons per worker.
Source: af Trolle 1965, p 365.
the 1920s, as shown in table 5.1.44 Thereafter, the productivity growth in cigar production slowed down, whereas it continued at a rapid pace in cigarette production.45