15.4. Unemployment and Slumps

Another set of factors in calculating the real incomes of the working class in England in these years, is the prevalence of recessions and slumps, general medium term unemployment, and shore-time working. There is a lot of difference – particularly for the men and women concerned – between a continuous income of 20 shillings a week, and an income of 20 shillings but with gaps of 12 months without money. There were industrial recessions in the First Industrial Revolution in: 1810-12, 1816-17, 1819, 1826-27, 1830-31, 1839-42, and 1848-48 (note: there were no recessions in England in the eighteenth century, thus the total lifetime earnings did not suffer a diminution). The worst was in 1839-42, and was a large part of the cause of the riots in the North and Midland of England in 1842. It is presented here in a long text, because it really had a great importance for the people of that time. 

“During the last twenty-five years the cotton trade has passed through three great crises: that of 1819, that of 1829, and that of 1841. The latter continued to the commencement of 1844, and the germs of it were manifest in the midst of the fictitious prosperity of 1836. In 1835 and 1836 two successive harvests had reduced the price of wheat to an average of 44s. 8d. per quarter. Wages roses considerably, and this rise, combined with the low price of provisions, gave the operative a command over the necessaries and comforts of life, which rendered his condition far superior to that of the agricultural labourers. The result was an extensive immigration of the latter to the manufacturing districts, where they immediately found employment. Labourers were to be had in any numbers, and as the demand for English goods in the American markets continued to increase, and the joint stock banks offered great facilities to their customers, speculation began. From the first of January, 1835, to the first of July, 1838, the new mills erected in the two counties of Lancashire and Cheshire, represented a force equal to 13,226 horse-power, of which 11,826 were appropriated to cotton; and those in course of construction represented an additional force of 4,187 horse-power.

Reckoning 500 pounds sterling, and five operatives to be required for each horse-power, it would follow that in less than five years a capital of 8,000,000 pounds sterling would be absorbed in the construction of buildings and machines in the two counties of England, and that 87,000 hands, with their wives and children, &c., would be added to the population.

This disorganized competition would alone have sufficed to produce a glut in the marker; but the crisis was still further accelerated and aggravated by external circumstances. Towards the end of 1836, the manufacture of cotton suffered a series of disasters, at the very period when a universal failure of the American banks took place, and deranged the commerce of that country.

After having diminished its importations by bankruptcy, the Americans next endeavoured to diminish them by an exclusive tariff. The duty on manufactured goods was raised from an average of twenty per cent to thirty per cent, for the purpose of protecting the young manufactures of Maine, Massachusetts, and Pennsylvania, against the competition of England. Several states of Europe imitated this policy, and although Manchester still sent its yarn into the states of the Germanic Union, it saw its woven goods excluded. At the same time the competition of foreign manufacturers became more formidable. The fabrics of Lowell obtained a preference over the English goods in the southern American markets. Saxon hosiery competed with that of Leicester and Nottingham, not only in the American market, but also in the English market. To increase the distress a succession of bad harvests had raised the price of wheat, during the years of 1838, 1839, 1840, and 1841, to a mean price of 66s. 5d. a quarter; and during this rise in the price of food of the community, the wages decreased from twenty to twenty-five per cent. Add to this the necessity of paying in gold for the importation of wheat to meet the deficiency, had exhausted the coffers of the Bank of England, and the directors, yielding to the panic, suddenly contracted their circulation, and thus gave a shock to commerce and manufactures. Manufacturing and commercial establishments which had not great solidarity were cast down, like so many paper buildings. It was an immense and terrible catastrophe, and of which the traces are still visible.”

(Faucher, 1845, pp. 141-143)

“In Great Britain, meanwhile, grievous reports of distress were being received in 1837 from all the manufacturing districts. At Paisley fourteen thousand men, generally employed in the weaving of fancy goods, had been unemployed for the whole of the summer, and the relief funds were exhausted. In the lace and hosiery districts of Nottinghamshire and Leicestershire, business failures were alarmingly frequent, and many thousands of workers were in desperate distress. Riots were taking place against the harshness of the New Poor Law, the operation of which was now for the first time being felt in the manufacturing districts. The effects of distressed trade were especially severe in the Lancashire cotton district, the fortunes of which were already closely bound up with the trade conditions in the United States. At Manchester, during the summer of 1837, fifty thousand workers were said to be out of employment, and most of the large establishments were working only half-time. At Wigan there were four thousand weavers entirely out of work; and the same situation was found elsewhere throughout the county. The entire trade of the district was brought to a standstill, and well-informed observers feared that unless trade improved rapidly half a million workers, at least, would be idle in the manufacturing districts, in the very worst time of the year. 

There had, of course, been trade depressions in almost regular sequence during the previous generation; but the most terrible feature of the depression beginning in 1836-7 was its long continuance. The troublous times of the later ‘thirties were succeeded by years of still severer distress in the early ‘forties. In 1841-2 trade was reported to be going from bad to worse in all the manufacturing districts, and especially in the Lancashire cotton area. At Stockport it was reported in 1841 that between six and seven thousand “hands” had been displaced from employment; and in 1843, when trade was believed to be recovering, horse-power adequate for the employment of over five thousand operatives was still standing idle. In that neighbourhood the wages for cotton-spinning had been reduced from 2s. 11d. per thousand hanks in 1839 to 2s. 6d. in 1841, and 2s. 1d. in 1842, for precisely the same work; and this 30 per cent reduction was said to be “about the general rate for spinning”, In the Manchester area the number of bankruptcies was still abnormal in 1842, and many factories were being closed down; some of the mills had been closed ever since 1836-7, and mill fires seem to have been curiously frequent.

A trade depression of such persistence inevitably caused important displacements of the manufacturing population, and checked for a time the current of townward migration. The 1841 census returns reveal a thinning of the population in many of the manufacturing townships through the stoppage of factories and the removal of factory workers in search of employment; while some other industrial towns were only saved from a decrease of population through the employment afforded by railway construction. Cobden asserted that in Stockport one house in every five was empty through the dispersal of the unemployed industrial workers. At Oldham, it was reported, no less than 1,800 houses were standing empty, and in many cases several families were living together in the same house; a similar report concerning the elasticity of demand for house accommodation was received also from the neighbouring townships of Rochdale and Saddleworth, as well as from Sheffield. 

At the time when all the manufacturing areas were suffering from extreme depression, wandering in search of employment was a desperate and demoralizing ordeal. Many hitherto respectable workers were reduced to begging from door to door for bread; others, more ingenious, picked up a precarious living in all sorts of curious ways. “Some have acted as porters and carriers; some have begun to sell hardwares; some have hawked salt for sale; some sand; some have gone about the country with vegetables … some go about hawking the various cheap publications of London.” Other textile workers, hitherto unused to heavy manual labour, became accustomed to spade work, and found employment “working on the road, or quarrying in the stone quarry, or assisting builders.” Detailed analysis of the reabsorption of one thousand labourers, displaced through the closing of a cotton-spinning mill near Bolton, showed that dispersion had taken place over the area of a circle forty miles in diameter.

Such readjustments of labour within and around the same industrial area may suffice to tide over minor fluctuations of trade, but were quite inadequate in so prolonged a depression. Luckily the period depression was marked by great activity in the construction of new railways, … “

(Redford, 1976, The Hungry Forties, pp. 119-121)

The situation was so bad, that calculations presented in the House of Lords by Lord Kinnaird showed i) that the general purchases by the working class had gone down by 15 % from 1836 to 1842, although the population had increased by 8 %, ii) sales of wheat had reduced by 7 % in two years, while the population had increased by 2.7 %.

The official register informs that Lord Kinnaird produced a table, showing that the money received in Customs and Excise Tax (recovered from the population, at rates given in moneys per article or by weight) had reduced considerably from 1836 to 1842. The population increased by about 8 % in those 6 years, so that one would suppose that the taxes would increase in the same proportion. But they actually decreased from 36.4 million pounds to 30.7 million pounds, that is by 15 %. Thus the purchases per capita of the population of their basic necessities went down by 21 %.

DatePopulation Net Produce:
Customs and Excise Tax
Actually Produced
   ££
183626,158,324gave36,392,472 
183726,518,885should give36,938,36333,958,421
183826,879,246 37,484,25434,478,417
183927,239,607 38,030,14535,003,633
184027,599,868 38,567,03635,536,469
1841   32,230,261
1842   32,340,739

But in 1840 the additional duty of 5 per cent was imposed. If that had not been the case, the receipts for the last three years (calculating the proportions) would have been:-

1840£32,401,000
184130,753,000
184230,723,000

This shows that the disposable income of the people decreased by about 21 % per capita. This information has two important consequences:

  1. The standard of living of the working class during the Industrial Revolution was not given only by movements in the contractual wages, but in some years, more importantly by the decrease in the numbers in employment or the numbers of days effectively worked, and the temporary cuts in wages; the multiplication of these effects gave a decrease in the average disposable income;
  2. The yearly movements in the disposable income of the workers, and thus in the amounts actually spent for food, rent, and clothing for the family, can be objectively calculated taking the customs and excise taxes of each year, divided by the size of the population; the resulting figures would have to be adjusted for changes in the rates of tax for each type of article, or the addition or removal of certain taxes.

Lord Kinnaird then commented the sales of wheat in 1840, 1841, and 1842.            

“He would now advert to a subject that was of great interest to their Lordships, as being the principal landowners in the country – he meant the consumption of wheat. The actual consumption of wheat had fallen off during the last three years to the extent of 1,361,252 quarters annually. He had been furnished with a very important document which had been prepared with the greatest care. It showed the quantity of wheat consumed from October 1839, to May, 1842, in separate periods of eight months each. The quantities of wheat sold in the 150 towns, from which the old averages were calculated, represented, as nearly as could be ascertained, one fifth of the whole quantity sold in the kingdom. The quantity sold in these 150 towns, from which the old averages were calculated, represented, as nearly as could be ascertained, one fifth of the whole quantity sold in the kingdom. The quantity sold in these 150 towns in eight months, from the 1st of October to the 1st of May in each of the three last Years, was:-

Oct. 1, 1839, to       May 1, 1840             1840 to                    1841 to                                                                           
1841                         1842
These multiplied by 5, show the sales in the kingdom      
                         2,620,753          2,467,783          2,216,201
                                               5                                 5                                 5     
                           13,103,765        12,338,915          11,081,005
To these quantities add the foreign wheat, which paid duty in each period                                     
1,138,492          1,311,642             2,200,000
                                14,242,257       13,650,557           13,281,005
In the two former years the foreign wheat was all consumed, and additional large quantities were delivered for consumption in May and June; but this year there remained in warehouse 400,000 quarters of foreign wheat which had paid duty.
Thus the difference between the consumption in 1840 and 1842 was 1,361,252 quarters.         

This means that the consumption of wheat went down by 7 % in a period of two years, while the population increased by about 2.7 %. But the most impressive point is that of the wheat imported in 1842, and on which import duty had been paid and thus the wheat had been physically discharged from Customs, 400,000 quarters (24,000,000 lbs.) could not be sold. The poor part of the working class population, who needed the wheat because they were starving, could not pay for it, however low the price was.

(Sitting of the House of Lords, 2nd June 1842, Lord Kinnaird on “National Distress”; http://hansard.millbanksystems.com/lords/1842/jun/02/national-distress)

In August 1841, about 600 non-Anglican clergymen gathered together in Manchester, to discuss what could and should be done by the authorities, to correct the horrible situation of the working class and the poor. The report of the conference is accompanied by a section of Documentary Evidence (40 pages). The figures had been collected by the clergymen according to a questionnaire. The report on towns in 26 counties of England (generally distributed) and some in Scotland and Wales. In practically all the towns there is extreme poverty, hunger, and poor housing; also the industrial companies have been unable to sell much more than the half of their theoretical production, and the food shops are selling less. (In some agricultural districts, and in Yorkshire, the workers and agricultural labourers have enough work and enough food) In many cases, it is noted that 1833-36 were prosperous years, and that 1840-41 had been catastrophic. 

Bristol

“I have never known (except in the depth of severe winters) employment as scarce as at present. Trades which within my memory regularly earned 24s. and even upwards per week, now receive only 18s., and work is so scarce, that if discharged from a regular place, there is considerable difficulty in finding employment. …. Employment is scarce, wages low, and provisions excessively dear. The condition of small traders is decidedly bad, as from decreased consumption, and increased bad debts. Their income is in many cases decreased from one-third to one-half, in some cases more. Many who a few years ago were doing considerable business at good profits, and now fast sinking into a state of insolvency.” (p. 244)

Daventry, Northampton

“The working classes are not well employed. The principal shoemakers in the town assured me last week, that they have an unusual stock on hand, for which they can find no market; in consequence the men have not had during the week more week given them than could with ease accomplish in four days. The average wage of our shoemakers is between 9s. and 10s. a week, the whole of which is, in many cases, spent in the purchase of bread alone …. The condition of the labouring population, as a class, is necessarily worse now than in former periods; as a proof of which, parents of large families have been compelled to send some of their children to the union workhouse, not being able to obtain for them the means of support.” (p. 248)

Tallywarn, near Pontypool           

“Some idea of the general distress in this parish may be formed from the fact that out of fourteen furnaces there are now but five on blast, and all the mills, where the iron is manufactured, in our vicinity, are stopped.” (p. 221)

In correspondence to the conference, we have:

“Thousands of these people are starving – actually starving; and deaths from starvation are constantly occurring. A poor law guardian asserts that they are numerous; two cases have been narrated that came under his own observation. James Birstal, native of Wiltshire, with a wife and six children, could get no employment. When visited they had nothing – there was no article of furniture in the house. The man was found dead upstairs, and an old rag thrown over his naked body. The last words he was heard to utter were two days before he died: “O that I had a little bread and a small piece of cheese!” There was another found stretched dead upon his loom. A jury brought in a verdict in this case, of “Death for want of food!”” (p. 206)

A similar Report was made out to the Anti-Corn Law Conference in 1842 in London. The conclusions were practically the same, although they covered only the manufacturing and domestic industry areas. An exception is that some of the mill workers in the better jobs, still have enough money to live on.

In Leeds the consumption of groceries and butcher’s meat declined by one quarter from 1835/1836; the decrease in consumption of meat by the “operative classes” was indirectly estimated to be one half. The unit price went up by 30 to 40 per cent. In one township, three quarters of the grocers went out of business in the period since 1833.

In Bradford, mechanics formerly employed by machine makers at 24 to 30 shillings a week, had to find work at breaking road-stones, or were dependent on the income of their wives or children.

In Manchester, the number of ill persons admitted to public dispensaries was 54,000 for the total of the years 1830-1835, but was 169,000 for the years 1835-1840: the annual mortality increased by 18 %.

The deaths in industrial counties (Lancashire and Cheshire) increased from 261 per 10,000 in 1838, to 288 in 1839 and 300 in 1840, i.e. 4,000 per year more in the sum of these two counties. The criminals committed to trial (we can suppose that many were for theft) in the industrial counties increased from 167 per 100,000 in 1838 to 239 in 1841 and 265 in 1842, i.e. 2,000 in the two counties.

Year     Agricultural Counties            Industrial Counties         Total England

 DeathsCommitted
to Trial
DeathsCommitted
to Trial
DeathsCommitted
to Trial
 per
10,000
per
100,000
per
10,000
per
100,000
per 10,000per
100,000
1838203155261167224154
1839188158288186219158
1840210165300224228173
1841207159258239216174
1842197180257265217194
1843205174254218212181
1844201141243168215160
1845208151246159209145

(Agricultural counties are Cambridge, Essex, Norfolk, Oxford, Lincoln, Suffolk, Wiltshire; Industrial counties are Lancashire and Cheshire)

(Extracted from Tougan-Baranowsky, 1913, p. 295; his data taken from Registrar-General’s reports)

Another phenomenon which cut into the workers’ incomes, was that of “short time working”, that is, a reduction in the number of days worked per week, so that full unemployment for a given number of men could be avoided; the official statistics may be reporting for example only 10 % “unemployed”, but it may be that the men are only working 4 days out of 6. We have data for the Black Country, that is, the coal, iron, and engineering region near Wolverhampton. In the eighty-five years from 1815 to the end of the century, only 23 were years of full employment. In the same period there were only three spells of sustained employment, namely 1834-37, 1845-55, and 1870-74. The effect of these cuts in income by up to 50 % was – in the worst years – destitution and hunger.

Page 234 of The Standard of Living in the Black Country during the Nineteenth Century

(Barnsby, 1971, Appendix 1, p. 234)

The following is a calculation of how much the earnings of the men were reduced in each year, due to the short time or other economic problems. The column 4 shows what percentage of the contractual wage was actually paid (estimation) in each year.

Page 238 of The Standard of Living in the Black Country during the Nineteenth Century

(Barnsby, 1971, Appendix IV, p. 238)

Weekly wage necessary to maintain a family of man, wife, two small children at a minimum standard of comfort: 25s. 0d. (1850), 4s. 2d. per day.

Weekly wage necessary to maintain a family of man, wife, two small children to subsist: 12s. 6d. (1850), 2s. 1d. per day. 

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