A cotton manufacturer in 1835 gave a further reason why the wages of the hand-loom weavers contracted in 1817.
“You think they [the owners] have not got so good profits from that time [1816]?” “No, I do not think they have.”
“At what particular juncture was it that this great pressure came upon the hand-loom weavers?” “It came on soon after the peace; began to come upon them soon after the general peace.”
“Was it in consequence of the manufacturers having less profit, that they were disabled from giving such good wages?” “There was not that demand, not generally, for the manufactures as there was before; there was more speculation.”
“Was not there a larger quantity manufactured?” “I do not know there was more manufactured.”
“Were not the exports larger?” “I think they pushed the thing rather too much, thinking we would have such a trade as never was known. …..”
“You are aware there has been a great nominal increase in exports since the peace?” “Yes.”
“And that the increase in the exports has taken place without a corresponding demand?” “I think there has been a great speculation in exports. …..”
……
“Then you think this great increase in the exports has taken place without the corresponding profit upon it?” “I do.”
“And you think the absence of profit has again re-acted on the condition of the hand-loom weavers?” “I have no doubt but it has.”
“And do you think that was what commenced the depression among the hand-loom weavers?” “That and some other circumstances with it.”
(Select Committee on Hand-loom Weavers, 1835, evidence from Mr. Jonathan Hitchin, manufacturer of muslins and cotton manufacturer; 13 April 1835, pp. 204-205)
This has a lot to do with the “Business Model” of the Lancashire cotton industry. From 1820, this was a very large volume business with low margins. “The very system of carrying our manufactures to such an enormous extent has been the cause of annihilating the profits of the manufacturer and reducing the wages of the workman.”
(Quote from a Stalybridge mill owner, 1829, Steinberg, Marc William; Fighting Words, Working-class Formation,Collective Action, and Discourse in Early Nineteenth Century England, Cornell University Press, Ithaca, New York State, 1999; p. 200).
“There is little question that it [the cotton trade] has not, upon the average, for years past, afforded those engaged in it a due remuneration for their capital and exertions ….. Ever since the peace, the prices of raw material, and of the manufactured goods, have been coming down; and it is, therefore, impossible that dealers in those articles should have been able to realize those regular profits, which, in a settled state of trade, they might fairly have looked to obtain.”
(Manchester Guardian, 1821, quoted in Collier, p. 11)
“To what circumstances do you attribute the low state of profit in the cotton trade?” “Certainly not to any want of demand, if we compare the demand now with the demand at any former period; but to an extremely extensive production with reference to the demand, arising out of a great competition, doubtless caused by the high rate of profit in former times, which, by attracting a large amount of capital to the business, has necessarily led to the low rate of profit we now see.”
(Select Committee on Manufactures, Commerce and Shipping, 1833, evidence of Mr. Kirkman Finlay, General Merchant and Manufacturer, London, Glasgow and Liverpool, p. 35)
“State the fall [in profit] since you have been a manufacturer?” “Since I have been acquainted with manufacturing, so as to be able to speak to it, the fall during the last 18 months, in my business, has been from 10 to 3 ½ per cent. But taking a much larger period than that, I will say, for the last seven years the profits in the trade that I am acquainted with have varied from 7 to 15 per cent., but in the muslin branch the average rate of profit is not more than 3 ½.”
(Select Committee on Hand-Loom Weavers Petitions, 1834, Mr. John Makin, Manufacturer, Bolton, p. 410)
The Industrial Revolution in England was not All Bad 