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Vertical Integration in the British Cotton Industry, 1825–1850: a Revision

Published online by Cambridge University Press:  03 March 2009

John S. Lyons
John S. Lyons
Affiliation:
The author is at the Department of Economics, Miami University, Oxford, Ohio 45056.
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Abstract

The paper examines changes in the organization of the British cotton industry from 1825 to 1850 in its core region of Lancashire and northeast Cheshire, using new data to delineate patterns of integration, specialization, and the adoption of new technology. The industry is usually assumed to have progressed from a rather specialized structure in 1825 to a highly integrated structure in 1850; much of the literature is devoted to explaining this trend. No such trend occurred, however, and the explanations are incorrect. An alternative view, focusing on technical change and profitability in spinning and weaving, is outlined briefly.

Type
Papers Presented at the Forty-fourth Annual Meeting of the Economic History Association
Information
The Journal of Economic History , Volume 45 , Issue 2 , June 1985 , pp. 419 - 425
Copyright
Copyright © The Economic History Association 1985

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References

1 Chapman, Sidney J., The Lancashire Cotton Industry (Manchester, 1904), pp. 161–63;Google ScholarJewkes, J., “The Localisation of the Cotton Industry,” Economic History Review, 2 (01 1930);Google ScholarTaylor, A. J., “Concentration and Specialization in the Lancashire Cotton Industry, 1825–1850,” Economic History Review, 2nd. ser., 1 (1949).Google Scholar

2 Matthews, R. C. O., A Study in Trade Cycle History (Cambridge, 1954)Google Scholar, chap. 9. See Lee, C. H., “The Cotton Textile Industry” in Church, R. A., ed., The Dynamics of Victorian Business (London, 1980), for a summary and reformulation of the views of Matthews and the others cited above.Google Scholar

3 Note that some integrated firms had either surpluses or deficits of yarn production relative to weaving capacity, and either sold or bought in the yarn market.Google Scholar

4 In particular see the London publication Circular to Bankers, which was used extensively by Matthews.Google Scholar

5 A survey taken by Inspector Homer in 1841 sorted firms by process, but the coverage excluded part of Lancashire and all of Cheshire. See Parliamentary Papers, 1842 12; and Gatrell, V. A. C., “Labour, Power, and the Size of Firms in Lancashire Cotton in the Second Quarter of the Nineteenth Century,” Economic History Review, 2nd. ser., 30 (02 1977). These are not discussed here because of lack of comparability with 1850 and Gatrell's differing emphasis.CrossRefGoogle Scholar

6 Baines, Edward, History, Directory and Gazetteer of the County Palatine of Lancaster…, 2 vol. (Liverpool, 1824, 1825); “Returns of … Factories,” Parliamentary Papers, 1850 (745) 52.Google Scholar The figure for handloom manufacturers is a rough estimate, based on the number of manufacturers listed in Slater's (Late Pigot & Co.) … Directory… 1848 (London, 1848), from which the number of powerloom firms in 1850 is deducted.Google Scholar

7 Underlying data are in sources for Table 2. See footnote 9.Google Scholar

8 Lee, “Cotton Textile Industry,” p. 168. Emphasis added.Google Scholar

9 Table 2 is based on a set of firm biographies for those who adopted powerlooms between 1795 and 1835. These are derived from a wide variety of directories, Parliamentary Papers, business histories, and newspapers. Details are available from the author.Google Scholar

10 Mitchell, B. R. and Deane, Phyllis, Abstract of British Historical Statistics (Cambridge, 1962), pp. 187–88;Google ScholarMatthews, StudyGoogle Scholar, chap. 9. Value-added data from Lyons, John S., “The Lancashire Cotton Industry and the Introduction of the Powerloom, 1815–1850” (Ph.D. diss., University of California at Berkeley, 1977), pp. 143, 194–203.Google Scholar

11 Matthews, Study, pp. 129–33, quotation from p. 132. Lee, “Cotton Textile Industry,” p. 168. The term “semi-reserve capacity” is from Matthews.Google Scholar

12 Matthews, Study, pp. 130, 132.Google Scholar

13 Powerloom firms from set of firm biographies; only the nine that added spinning capacity by 1835 appear in Table 2. In 1833 the Factory Commission received information about ages of textile mills, among other things. Data on spinners is from a selection of firm data; also, of 81 integrated firms extant in 1825, 20 added new spinning mills between 1826 and 1833. Only one in 15 of the spinners of 1825 chose to integrate by 1835. See Parliamentary Papers, 1834, 20.Google Scholar

14 The standard source of jeremiads is Select Committee on Manufactures, Commerce, and Shipping, Parliamentary Papers, 1833 (690) 6, evidence of G. Smith, W. R. Greg, and J. Milne.Google Scholar

15 Lyons, “Lancashire Cotton Industry,” chaps. 2, 4, Appendix II.A.Google Scholar

16 For example, Pollard, Sidney, “Capital Accounting in the Industrial Revolution,” this JOURNAL, 24 (09 1964).Google Scholar

17 This section is based in part on my work with the Greg Business Records, Manchester Central Library, and on Rose, Mary B., “The Role of the Family in Providing Capital and Managerial Talent in Samuel Greg and Company, 1784–1840,” Business History, 19 (01 1977), quotation from p. 44.CrossRefGoogle Scholar

18 Low bankruptcy rates during and after the mid-1820s slump support this view. Eighty-two firms were adjudged bankrupt in the cotton industry of the region from July 1825 to December 1828. Of these, 38 were spinners, or 8 percent of the 1824/25 base, and 21 were integrated, or 6.5 percent of the base. London Gazette, above dates.Google Scholar