Lessee (1887–1891) The rolling mill at Mittagong proved unsuitable and Sandford relocated his operations, in 1887, to the rolling mills of the
Eskbank Ironworks at
Lithgow, which he leased for the purpose from
James Rutherford. He bought a 2000 acre property at Bowenfels, to the west of Lithgow, and added a second story to the existing house, creating an 11-room home, which he later named 'Eskroy Park'
Ownership, expansion, and tariff protection (1892–1900) In 1892, Sandford purchased the Eskbank Ironworks, using money loaned by the Commercial Banking Company of Sydney, and was given a government contract in railway parts. It was a brave move, at a time when Australia was enduring a
serious economic downturn. Moreover, he began expanding the plant, in the expectation that protection against imports would be forthcoming. Around the time he purchased the Eskbank works, Sandford became a vigorous
protectionist, leading the Lithgow National Protection Association. The issue of protection against imports was the principal political division of late 19th-century Australia. In New South Wales, almost alone of the Australian colonies, there was widespread support for
free trade. A growing force was the
Labor Party; it somewhat favoured protection, as a means to maintain relatively high wages, but also advocated
nationalisation of major industries, complicating its policy toward enterprises like Sandford's. However, at the
1891 election, it was the protectionists who won office in New South Wales. seat of
Hartley. Free traders were not opposed to a local iron and steel industry; their view was that it could come about, without a protective tariff. The N.S.W Government had offered a large contract for locally made steel rails. A leading free trade businessman and politician,
Joseph Mitchell—like Sandford, a strong and tireless advocate for a local iron and steel industry Sandford had not tendered; his view was that, without protection, local industry could not compete. Another company G & C Hoskins—owned by brothers George and
Charles Hoskins—did tender, unsuccessfully. In 1899, Sandford attempted to interest his friend Charles Hoskins in buying the Eskbank works but the offer was declined.
Federation, first steel, expansion, Bonus Bill, and Arbitration Court (1901–1904) With
Federation, in 1901, tariffs and duties between the colonies were abolished and the matter of import protection came one for the new
Commonwealth of Australia to decide at a national level. With the election of a
Protectionist minority government in the new Australian House of Representative, Sandford became optimistic that protection for the iron and steel industry would be forthcoming. In 1901, he set up William Sandford Limited as a public company—although Sandford himself owned nearly all the shares—and in that same year, Lithgow first produced
steel, Although Sandford's Lithgow works was not the
first to produce steel in Australia, it was the first to do so in large quantities by using the
Siemens-Martin Open Hearth process. The feedstock was either scrap or imported pig iron, since no iron had been smelted in Australia since 1884, when the
blast furnace at Lal Lal closed; the original (1875) Lithgow blast furnace had closed in 1882. Also in 1901, he put into operation a new sheet mill. Sandford, confident that protection—under the Bonus Bill, an act of the new Australian Parliament—was imminent, went to England. He returned in June 1902, with news that he would raise £750,000 of British capital and float a new company, Australasian Iron and Steel Corporation Limited, and hosted an English visitor associated with these plans. He stated that
"The intention of the new corporation is to extend the works. Their expansion will materially depend on the confirmation of the Bonus Bill by the Federal Senate, so far as it applies to iron made from Australian ores, and the confirmation of the tariff with respect to iron manufactures." However, his return to Australia coincided with the effective defeat of the Bonus Bill.
Edmund Barton's Protectionist minority government relied upon the Labor Party to pass any legislation. Labor had combined with the opposition Free Trade Party—led by Sandford's Free Trade nemesis,
George Reid—to amend the legislation in such a way that caused it to provide less protection than had been expected. Labor wanted a nationalised iron and steel industry and did not want to stimulate the further growth of a privately owned one. Although Sandford was feted upon his return to Lithgow, his plan for a new and well-capitalised company to expand the Lithgow works was stymied. In 1903, Sandford had to close the sheet mills at Lithgow altogether but continued to make galvanized iron using imported sheets. Sandford had begun to face financial difficulties due to rising costs, uncertain markets and scarcity of material, and—in his own view—the absence of protection against import competition. He had contested the
first federal election, in March 1901, as a
Protectionist candidate for
Parramatta, but was defeated by
Joseph Cook. In 1903, he again ran for the federal parliament, this time against
Free Trader
Sydney Smith in
Macquarie, but he was again unsuccessful. In 1904, William Sandford Limited settled two disputes with its employees in the
N.S.W. Arbitration Court.
State contract, blast furnace, and first integrated steelworks (1905–1907) As steamships came to replace sailing ships, cheap pig iron, in the form of ballast, was being imported less. On a steamship, pig iron would be carried as paid cargo. Sandford embarked on a major expansion, starting with the construction of a large modern blast furnace. On 30 April 1907, his daughter, Clarice, started the blast of the new furnace, and Sandford's proudest moment was when it was officially opened on 13 May 1907. As part of the same expansion, a new 15-ton Open Hearth furnace was added to make steel from the pig-iron, The Lithgow works had become the first integrated iron and steel works in Australia. Sandford had built his new blast furnace some distance from the steelmaking furnaces at the Eskbank works, which has been criticised as a poor decision. However, it was intended to be only the first of four such blast furnaces, feeding a new and larger steelmaking facility nearby, which in turn would feed a line of new rolling mills. Sandford had the general layout of this new plant designed by English consulting engineers, J.H. Harrison, based on earlier advice from an English expert, Enoch James. These plans are proof of the grand vision that Sandford had for Lithgow; his problem was how he could fund it. A proportion of the iron production was destined to be railed to Sydney for use in manufacture of
cast iron products, such as pipes, and the location of the furnace near to the main railway line was logical from that standpoint. However, prior to the foreshadowed expansion, any molten iron destined for steel production needed to be cast into pigs, taken in solid form to the steelmaking plant, and then remelted—a thermally inefficient arrangement that increased steelmaking costs, compared to moving the iron in molten form. Sandford had constructed the new blast furnace seemingly on his own account—later it was reported that he had used a bank loan of £63,500 to fund it, not his own money
Failure of William Sandford Limited In debt after such a rapid expansion and under-capitalised, the company was in urgent need of more capital. It needed still more capital to carry out the vision for a larger works. During a visit to England in 1905, Sandford started negotiations with his former employer, John Lysaght Limited, of Bristol, England, with the aim that Lysaghts would take a stake in the Lithgow works and inject capital. These negotiations went on for 20 months, with Lysaghts prepared to provide most of the necessary capital, but finally broke down over Sandford's insistence of remaining in absolute control. His rejection of this financial lifeline, in June 1907, left him and his company in a dire situation. Beginning around September 1906, Sandford had shown signs of a deteriorating mental state. During this time, his competent and reliable General Manager, William Thornley, was a steadying influence. However, ultimate authority lay with Sandford, who had become increasingly more eccentric and unpredictable. His anxiety was clouding his ability to think clearly, work properly with his managers, and make good decisions. His compulsion to retain personal control is difficult to understand, given his advancing age; he seems to have been hoping that one of his sons could take the helm, if he had more time, or perhaps he was obsessed with delivering his grand vision himself. applied for 10,000 of the shares but changed his mind when he saw the books of the company. There had been no real attempt made to interest large investors in taking up shares. Applications closed on 14 October 1907. The raising was a failure, with applications for only 18,599 shares—a significant portion were shares allocated to directors—and the money raised was returned to subscribers. The erection of an imported 24-inch mill, needed to roll rails, had yet to be completed. Sandford appealed to the N.S.W. Government for assistance. The Premier,
Charles Wade, offered an advance of £70,000, as a loan to the company, under stringent conditions, and with the agreement of the bank not to call in its existing loan to Sandford and to reduce the rate of interest on its loan. The nature of the arrangement necessitated that it be ratified by the N.S.W. Parliament. The bank stated that, even if the Government loan went through, it would not lend further money to the company above the existing overdraft limit. After debating the issue all night, the N.S.W. Parliament passed legislation ratifying the loan, in early hours of 5 December 1907, but a last minute amendment—moved by the
Labor Party, leader,
James McGowan, who favoured a
nationalised steel industry—made the government loan take absolute precedence of security, over existing commercial loans. The final form of the legislation alarmed the bank, which then withdrew its tentative agreement to support Sandford, demanded full repayment of the overdraft amount, and took over the assets on 9 December 1907. Only the new blast furnace was kept in operation, to prevent its destruction if it were to cool. 700 workers became idle.
Hoskins take over Sandford's shares became essentially worthless and he faced financial ruin, at the age of 66. After years of great mental stress, he was a broken man. The Lithgow works was too large an employer and economic asset to be allowed to close down. Sandford met Premier Wade on 11 December 1907, but that would be his last involvement. Other discussions took place, concerning the future of the works, between the bank, the N.S.W Government, and the firm of G & C Hoskins, and a plan was formulated, without Sandford's involvement. There was, however, public pressure to ensure that Sandford's pioneering role in the industry was recognised by ensuring he was not ruined financially. There was also great concern, about the future of Lithgow and the existing investments in housing and infrastructure there. The Eskbank Ironworks and its near new blast furnace were taken over by the Hoskins Brothers (G & C Hoskins) in 1908.—ensuring Sandford's future financial security. Sandford would lose his home and possessions at 'Eskroy Park'. and nobody but Sandford himself had lost any money. He expressed some satisfaction with that outcome, stating that,
"I have come down, but I have dragged nobody with me". Lithgow after Sandford The long-sought protection of the iron and steel industry was finally introduced, from the first day of 1909, by
Andrew Fisher's Labor government, in the form of bounties to be paid under the new ''Manufacturers' Encouragement Act
, which made it a condition that those benefitting from bounties would pay "fair and reasonable wages''". The new legislation came too late to save Sandford, but the bounties alone probably would not have been enough to
turn around the Lithgow operations in the manner Charles Hoskins would do by 1914. G & C Hoskins had been a large customer of William Sandford Limited—using pig iron in their iron pipe foundry in Sydney—and one of the very few outside shareholders of William Sandford Limited.
Charles Hoskins was one of Sandford's closest friends and a fellow protectionist. Even after he had left the industry and Lithgow, Sandford continued to be an advocate for the iron and steel industry at Lithgow and to defend his role in it, of which he was proud. In 1893, when orders at Lithgow were slack, he obtained work for some of his employees at the
Onehunga Ironworks in New Zealand. He provided cheap land for his workers and assistance to build their houses, including providing house designs and guaranteeing their bank loans. an arrangement which he advocated and in which he took some personal pride. When the subsequent owners, G & C Hoskins attempted to change these employment arrangements to
day labour, it began a series of bitter and sometimes violent
strikes and
lock outs lasting almost four years. This and the concern he held for his workforce explained much of the mental anguish that characterised his later years at Lithgow. == Legacy ==