Business History in Spain (19th and 20th centuries)
This book brings together the research carried out by its authors with primary sources and makes it accessible to a wide audience, Spanish and Latin American; the book is especially written for an audience that does not speak Spanish or does not know the topics discussed in it.
Table Of Contents
- About the author
- About the book
- This eBook can be cited
- 1 The second level of Spanish capitalism during the Restoration period: The Escoriaza group, a family-owned conglomerate in the world of public works
- 2 Foreign companies in Spain (1911–1920)
- 3 Entrepreneurial profiles in the Transition to democracy in Spain
- 4 Water supply companies in the Spanish Levante (1840–1939)
- 5 The gas industry in Madrid during the period following the Spanish Civil War: Gas Madrid, S. A.
- 6 Gas Andalucía S.A., the company leading the introduction of natural gas to Andalusia (1987–2001)
- 7 British investments in the gas industry in Spain: the role of the freestanding companies
- 8 Rural credit banks: Credit cooperatives for the land. The case of Andalusia (1902–2000)
- 9 The jump in quality of Spanish insurance companies between 1966 and 2000
- 10 The impact of First World War on neutral countries’ railways: The Spanish case
- 11 Car manufacturers in Spain and Portugal during the second half of the 20th century. A comparative historical perspective
- 12 Wine exporters in the city of Cádiz between the 19th and 20th centuries: Lacave & Company
- 13 Hotel businessmen in Spain in times of change (1930– 1959). The case of Hoteles Unidos, S.A. (HUSA)
- About the authors
Gregorio Núñez Romero-Balmas
1 The second level of Spanish capitalism during the Restoration period: The Escoriaza group, a family-owned conglomerate in the world of public works
Abstract The different businesses within the railway sector are closely interwoven. Three of these businesses are especially important: the actual construction of the works, the supply of material and project restructuring. One particular family of entrepreneurs, the “Escoriazas”, operated efficiently in all three of these segments. Through a conglomerate of family-run companies, for decades the group was engaged in the complex and fluid world of the periphery of the large railway businesses. To do this, the “Escoriazas” drew from a broad network of national and international financial contacts and formed a large group of companies and contractors, becoming masters in the constitution, management and dissolution of these companies. The historiography reveals it to be a highly interesting differentiated segment. On the one hand were the large railway companies; and on the other, the small construction contractors which are almost opaque for historians. This business conglomerate of the Escoriaza family is fairly transparent and can be used to explain how these businesses operated.
Many decades ago, back in the nineteenth century, the business world in Spain was polarised between a small number of large, monopolistic companies, many of which are well-known, and a wide variety of small or very small companies that were highly competitive and accounted for the rest of the Spanish business fabric and are practically unknown to historians (González Ruiz & Núñez Romero-Balmas, 2016). In the past, and also today, one of the main problems of the Spanish economy has been precisely the poor articulation of the enterprise system and specifically the low growth capacity of small companies. A lack of medium-sized companies may also be observed. This phenomenon is relevant and very striking when compared with, for example, the case of Germany. This is the case not because medium-sized firms, on the whole family-run, are not feasible in Spain, but because institutional aspects or simply historical factors have made it this way and it is a situation that is very difficult to correct.←9 | 10→
With respect to family-run companies in the historiography, there is an abundance of publications (Rose, 1995; Colli, 2003; Puig Raposo & Fernández Pérez, 2009; Lubinski et al., 2013) Recently, the consultancy firm KPGM and the Family Enterprise Institute in Spain published their fifth barometer regarding the situation of family-run companies, a category that is very similar to our object of study. The Barometer includes a survey of 288 companies or groups of companies of this type and highlights the following features: the great majority are managed by members of the same family (79 %) but not by the generation of the founders but by the second or third generation (75 %), even 8 % are managed by the fourth generation or younger; of course the immense majority of the capital (74 %) is owned by the family and very few (3 %) have needed and/or wanted to be listed on the stock exchange. Despite the alleged archaisms that are usually attributed to this category of firms – traditionalism, endogamy, a lack of professionalism in management, difficulties to grow when not listed, etc. – the above-mentioned features have not impeded these companies from employing between fifty and a thousand workers (63 %), reaching annual turnovers of between ten and two hundred million euros or having a noteworthy organisational stability, most having operated for more than twenty years (93 %, of which 53 % have been operating for fifty years) (Instituto de la Empresa Familiar and KPGM 2016). It is clear, therefore, that the organisational peculiarities of these second level companies do not limit the growth or diversification of their activities. Rather, they take advantage of specific opportunities that favour the flexibility, stability and long-term planning of these types of firms and the entrepreneurs who founded them. Modern studies in the field of business economics refer to medium-sized family-run companies and the historiography has also addressed the topic with a select but not exhaustive bibliography (Colli, Fernández Perez & Rose, 2003; Fernández Perez & Puig, 2004; Fernández Pérez & Colli, 2013; Fernández Pérez, 2017). We could also study this family conglomerate with solid international contacts from the perspective of the free-standing companies (Wilkins & Schröter, 1998).←10 | 11→
The afore-mentioned serves as an introduction to present a second-level family group operating in the large business world of the Restoration Period in Spain (1874–1931): the Escoriaza family, and more specifically its principal and most well-known member, Nicolás Escoriaza, Viscount of Escoriaza. The group was made up of a wide variety of companies, a flexible conglomerate of firms that successively appeared and disappeared, entering and leaving the family group. Some of them were limited companies, others even listed and others simply public works contractors. The group also incorporated other types of firms such as hotels, real estate companies, public works and rail management firms, among others. All of this was managed by three generations of men initially from the political and business worlds. The activities of the family started a little after the liberal Sexennial began in 1868 and lasted until the end of the Franco regime.
2The “Escoriazas”; three generations of entrepreneurs between two industrial revolutions
The Escoriaza family and more specifically Nicolás Escoriaza y Fabro, have received much attention in the historiography (Fernández Clemente, 1977; Germán Zubero, 1980; Biescas Ferrer, 1985; Fernández Clemente, 1997; Cayón García & Muñoz Rubio, 1998; Mohedano Barceló, 1998; Núñez Romero-Balmas, 2008a, 2019). There is no exhaustive and definitive study on the business conglomerate or a biographical study of the viscount due to the inability to locate the family archive, which is believed to have been lost during the war or the immediate post-war period.
A brief description of its century-old history will reveal three generations of entrepreneurs who, although, displaying clear differences over the years, were also characterised by their decisive resolve to ensure the continuity of the family group. The figure at the very heart of the group was Nicolás, undoubtedly the member with the highest profile both socially and in the business world. He was also the central node of the financial contacts network in Spain and abroad which determined the group’s competitive advantage.←11 | 12→
The first generation of the “Escoriazas” was formed by José Pascasio and his brother Eurípides. The former was a progressive politician born in Puerto Rico. After studying in Zaragoza, Vergara, Madrid and Seville, he soon gained prominence as an anti-dynasty politician and as a journalist (Enciclopedia Universal Ilustrada Espasa-Calpe). He was the son of a military officer which is why the biography of his early years is characterised by intense mobility (Melgar, 2003). His Caribbean roots undoubtedly motivated him to join the anti-slavery movement at a young age as a representative for Puerto Rico in 1868. During the Sexennial, he held several high-ranking state government positions including the Director General of Public Works. He left politics after the Republic was proclaimed and emigrated to France where he brought up his children and where undoubtedly he was able to establish a network of political and business contacts who his children were subsequently able to draw from with very good results. During the first few years of the Restoration he laid the foundations of the future business group, starting out in the complicated but lucrative business of acquiring and reconverting railway companies that were experiencing difficulties.
The second generation members of the family to lead the group were the sons of José Pascasio, particularly Nicolás, Manuel and Virgilio. Together with their father, they ensured the consolidation, growth and diversification of the family group, driven by both the state policy of secondary railways and the wave of electrification of the trams in Spanish cities. In the diversification process, the constitution of the company Cardé and Escoriaza (1897) in Zaragoza for the construction of rolling stock for railways and tramways represents a fundamental milestone, which, together with Nicolás’ social networks, formed one of the principal bases of the group’s competitive advantage. This company, which soon dominated the activity of installing electric motors in a good part of the Spanish tramway networks, survived for many decades. It even sought to diversify its activities (for example, the manufacture of material for the army, including the assembly of aeroplanes) during the 1920s, operating under the name of Material Móvil y Construcciones (1920). In this way, from the end of the nineteenth century and until the Spanish civil war, the family group formed a conglomerate made up of two branches. One was engaged in the construction and installation of rolling stock for railways and tramways with its head office in Zaragoza and directed by Manuel. The other was formed by a complex and changing group of railway or tramway companies, some engaged in developing construction projects that had failed or were in serious difficulty and others in carrying out long-term management projects. This side of the business was directed by Nicolás. He changed his address several times to Granada, Madrid and San Sebastián and seemed willing to undertake any initiative that he deemed feasible, from directing the Spanish section of the International Exposition of Brussels (1910) (probably personally commissioned by King Alfonso XIII) to the construction of reservoirs and canals within the framework of the policy to increase the number of hydraulic constructions for energy and irrigation. Manuel however, settled definitively in Zaragoza. He also diversified but by intervening in several local businesses, from town planning to the construction of a hotel, including regional railway companies, the tramways of Zaragoza and local banks (Banco Aragonés de Crédito), even sitting on the local council of the Banco de España in which he was succeeded by his brother.←12 | 13→
The third generation of “Escoriazas” was basically formed by the sons of Nicolás (the Escoriaza Averly) and those of Manuel (the Escoriaza Castillón). Given the preferences of the two brothers, the third generation seemed very biased with respect to the two main branches of the family group as they had been shaped by their fathers and had suffered a major setback with the civil war. The Escoriaza Castillón, firmly established in Zaragoza, became consolidated as managers of the rolling stock construction company and other local businesses that prospered after the war, including the tramways and bus networks of Zaragoza. The Escoriaza Averlys, however, established in Madrid and consolidated in the management of secondary railways and tramways (e.g. Ferrocarriles de Castilla, Tranvía de Cádiz a San Fernando y la Carraca) lost their father in 1936, who was murdered in San Sebastián, and suffered the vicissitudes of the sector. Specifically, the nationalisation of the main railway companies to construct RENFE and the decline of the small networks, together with the motorisation of road traffic forced the decline of the local railways for goods traffic.
The “Escoriazas” knew how to take advantage of operating in the periphery of Spanish and international capitalism and the same can be said of the regional distribution of their initiatives. Their group was based in Zaragoza, an important and dynamic city but not among the principal areas of national industry, which were basically those of Barcelona and its surrounding area, Madrid, Bilbao and Valencia. A wider group of secondary cities in this industrialisation process, such as Seville, Málaga, Granada, Valladolid and Santander constituted a second urban and business level among which Zaragoza was particularly prominent.
Throughout his life, Nicolás Escoriaza changed his address several times. The first choice was Zaragoza in the 1880s. This was by no means a mistake, rather a very significant move. The reason why he settled there could be the early ties of the Escoriaza family with the MZA railway company and its first operations as works sub-contractors. These activities grew and diversified very quickly. Later, when the group was able to take direct control over the railway and tramway concessionaire companies, the benefits and opportunities of its location became evident, given the many pending railway initiatives in the region. It is worth mentioning the company Ferrocariles de Zaragoza al Mediterráneo as an example and the first known operation of the “Escoriazas” at this operational level of the group (Núñez Romero-Balmas, 2019). In this way, Zaragoza became consolidated as the centre of the Escoriaza conglomerate for the whole of its long history and was the only place where it diversified activities with an industrial branch (los Talleres Carde y Escoriaza, a metal and wood carpentry firm engaged in the construction of wagons for railways), in parallel and complementing the execution of public works and the management of railway and tramway companies.←13 | 14→
The city enjoyed a central location and operated as the capital of a good part of the Ebro basin, from the Pyrenees to the Iberian mountain range, from Navarra to Tarragona, and it was practically in the centre of the triangle formed by the principal industrial cities of Spain. It therefore constituted the centre of the large railway system of which the main lines had just been completed by the Norte and MZA railway companies in north-east Spain. From then on, different initiatives seeking to complement them and give them greater density were implemented through a secondary railway network, with the support of the State.1 Making the most of their central location, the “Escoriazas” intervened in different business initiatives in the region. The fact that Nicolás, over time, established his residence in Madrid and San Sebastián shows his connection with the highest level industrial and financial networks, which he could endorse with the industrial capacity of the family based in the Iberian capital city (Núñez Romero-Balmas, 2010). Furthermore, the closeness of France also helped these entrepreneurs to establish contacts with Bordeaux, Paris and Brussels. These contacts accounted for a good part of their competitive advantage. This was similar to what occurred with the Tudor company, which shared international and national networks with Escoriaza and also chose Zaragoza as the place to base its industrial activity (Biescas Ferrer & Germán Zubero, 1992; Moreno Fernández & Sancho Sora, 2013).←14 | 15→
On the other hand, the economy of Zaragoza at the time was already complex and dynamic and highly promising for the long term.2 The city had a diversified business fabric in which, for example, metallurgy was a major sector at a decisive moment in Spain’s industrialisation process. But, most of all, the city and its region intensely benefited from the protectionist turn imposed in 1891 by the Cánovas Tariff, particularly due to its protection of mass agricultural products such as wheat and sugar and associated industries.3 On the other hand, one of the principal centres of the civil and administrative movement in favour of a hydraulic policy based on the construction of large hydraulic works and the extension of irrigation to a large-scale format was also based in Zaragoza, reaching a unique milestone in the founding of the Confederación Sindical Hidrográfica del Ebro in 1926, the first of its kind. We could say that the city and its region constituted a paradigm of the opportunities to be had in Spain at the end of the nineteenth century, as it formed part of the interior, agricultural territory, basically oriented both in terms of agricultural production and the agrofood industry complementing this, to the domestic market, highly protected by the 1891 and 1906 tariffs. In addition to all of this we should also mention the great opportunity derived from the availability of waterfalls which had an energy potential that was actively developed through local initiatives (Germán Zubero, 1990).
The Aragonese business fabric was completed with the promotion of several banking and insurance initiatives, in several of which the Escoriaza brothers participated. All of this highlights the vigour and broad vision of the family group and the solvency of the local context.4←15 | 16→
Therefore, it is not surprising that the Escoriaza group chose Zaragoza as the centre of its activities of at least three complementary branches. First, the aforementioned execution of public railway works. Second, metallurgy and the construction of rolling stock for railways and tramways for companies throughout the whole of Spain. This was probably the differential element of the group in which it became a pioneer in Spain. And, closely related to the construction of rolling stock was the promotion, in some cases, and the modernisation and electrification in many others, of urban tramway networks in Spanish cities, which were singularly important and long-lived, including the company Tranvias de Zaragoza.5 The third and final branch of activities was the intervention in a variety of local initiatives from town planning to real estate promotion and the hotel trade. It was precisely the urban sector that provided a final opportunity to the third generation of the group when the railway works and the management of tram and secondary rail companies declined and terminated and the manufacture of rolling stock was incorporated into another industrial group (CAF). Zaragoza enabled the Escoriaza Group to enhance its dynamism as a large city immersed in a century-long vigorous growth and modernisation process. The local trams are, undoubtedly the best example but they also intervened in several investments related to local town planning, real estate promotion, the hotel trade and any other medium or large scale activity that required a great intensity of capital and specific management needs. After the civil war, when the other branches of activity of the group, the secondary railways and tramways in particular, were disposed of, stagnated and/or began their terminal decline, the Group concentrated on its activities in Zaragoza and was able to remain active precisely in this branch of activities, of a local but highly promising scale.
In this respect, the constitution of the company Cardé y Escoriaza in 1897 for the manufacture of rolling stock for railways and tramways represented a fundamental strategic turn. Thereafter, the “Escoriazas”, with the support of the Bordeaux-based constructor Pablo Cardé, became the suppliers of rolling stock for the large Spanish railway companies and soon became a leading agent in the imminent boom in the electrification of the Spanish tramways. Belgian investors and the “Escoriazas” themselves played a highly prominent role in this strategy (Martínez-López, 1998). The contacts that the family had with the railway industrial circles and the French and Belgian electrotechnical companies (the Française Thomson-Houston electric company, in particular) played a decisive role for the future of the group. As well as the electrical tramways of a good part of Spain we should also add the promotion of regional rail initiatives within the framework of the strategic and secondary railway plans (Ministerio de Agricultura, Industria y Comercio de España, 1904).
4Following national sugar? Granada, Castilla, …←16 | 17→
After his successful installation in Zaragoza and becoming a member of the small business elite able to intervene in his own name and in close cooperation with the major railway companies and leading groups involved in the electrification of the Spanish tramways, Nicolás Escoriaza set his sights on the city of Granada. There was a tramway project there that had been delayed for more than a decade and did not have the support of local promoters or the intervention of foreign investors. For this reason, Escoriaza moved to this city with the intention of undertaking the project, managing it directly and from the outset addressing the technical and financial difficulties involved in electrification.6
In many aspects, the economy of Granada at the time was similar to that of Zaragoza. As in the Aragonese case, the territory included important cities, Granada, of course, as well as Málaga and Almería and a large group of longstanding smaller towns. But, contrary to Aragon, we could describe this area as Andalusia’s “far east” which had a peripheral and isolated location in the national territory and encountered serious transport problems which only the coastal towns could overcome thanks to sailing (Fernández Sánchez, González Ruiz & Núñez Romero-Balmas, 2019). All of this made it a failed candidate to becoming the regional capital, secondary to the more dynamic cities of the country. Like Zaragoza, Granada and its region formed part of mainly agricultural territories that intensely benefited from the nationalist involution from 1891.7 Therefore, cereal farming and olive growing and consequently, the flour and olive oil industries, even wine production before the phylloxera crisis (Piqueras Haba, 2005; Molleví Bortoló & Serrano Giné, 2007), and other segments of the agrofood industry were profitably extended throughout the province and required significant investment in transport infrastructures in order to overcome the topographic limitations. We should also add the promising innovations of the second industrialisation, particularly the production of cane sugar (on the subtropical coast) and beetroot (on the plains of the interior of the region, across the whole of the Intrabetic Basin); an expansion which, for at least a decade, allowed Granada to be thought of as the national capital of the sugar industry. Activities derived from the sugar industry were also developed, such as the production of alcohols and other equally modern activities that were more or less related to the above-mentioned industries such as the production of fertilisers and cements, essential oils and a relatively broad range of industries that were small but covered a wide range of activities from the production of cured meats and cheeses to small-scale metallurgy activities (Jiménez Blanco, 1986; Malpica & Martín, 1992; González Ruiz & Núñez Romero-Balmas, 2007; Martínez Soto & Rosado Cubero, 2017; Germán Zubero, 2020).←17 | 18→
In this way, a new and promising export base was developed in the region whose market was not necessarily limited to the small domestic consumption. And, like Zaragoza and its surrounding area, there was a large number of waterfalls in Granada which could be exploited with low-complexity and low-cost plants, one of which was installed by Escoriaza and his local tramway company. As in the case of the sugar industry, Granada seemed to be destined to become a regionally significant hydroelectric centre with many local companies, but the scarce demand and lack of cooperation between the local capitalists frustrated this expectation in the life cycle of the first generation of electrical industrial installations (Núñez Romero-Balmas, 1994, 1998; Piñar Samos & Giménez Yanguas, 2019). With all of its advantages, the logic of protectionism, which constituted the institutional support of the expansion of the Spanish flour and sugar industries, imposed limitations. The production of sugar expanded to other regions (Zaragoza, Valladolid, Madrid, Navarra) and, with overly high prices and costs, the supply soon exceeded demand even though the per capita demand was growing vigorously. The constitution of a quasi sugar monopoly in 1903 (Sociedad General Azucarera) reorganised this industrial branch, but, although a group was formed of free sugar producing companies that were proliferating in the province of Granada, the sector suffered from a golden decline as a result of the high protection and the limited internal demand (Martínez Soto & Rosado Cubero, 2017).
We could consider the business conducted by the “Escoriazas” in Granada in the same way as the first phase of their operations in the tramways of Zaragoza. They adapted to the usual model of intervention of tramway and railway installing companies. They took on a project that was experiencing difficulties, resolved the pending problems using financial contacts even on a European scale, mediating between them, ensuring the execution of the project and, once concluded, transferred the management and capital to other interested groups. A considerable part of this capital had to remain in local hands, which was apparently well-equipped at that time financially speaking and in terms of complementary initiatives.
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- 2021 (April)
- Entrepreneur Entrepreneurship
- Berlin, Bern, Bruxelles, New York, Oxford, Warszawa, Wien, 2021. 238 S., 7 Tab.