Empire of Cotton

by Sven Beckert

  The focus of the old manufacturing base also shaped the avenues each region followed to industrialization. In some areas of the world, cotton industrialization unfolded from basic spinning, with the weaving and printing of textiles being secondary. In the United States, for example, as in England itself, industrialization was led by basic manufacturing, namely spinning, moving next into weaving and, later, printing, the application of colorful designs on cotton cloth imported from elsewhere. In many other parts of the world, among them Belgium, Russia, and Alsace, however, cotton industrialization emerged from a thriving printing industry.11

  The Spread of Industrial Capitalism, 1780–1860

  Whether led by spinning or printing, in all of these regions rural people had spun and woven in their cottages, farmhouses, and huts and had done so under the direction of merchants. In Saxony, cotton spinning and weaving extended back to the fifteenth century, with peasants first producing yarn and cloth for their own use. By the eighteenth century, merchants had built a complex putting-out system, advancing raw cotton to farmers to later retrieve finished yarn and cloth from them. Eventually some of these peasants became full-time spinners. By 1799, in and around Chemnitz as many as fifteen thousand people spun cotton in their homes. As workers honed their skills, merchants accumulated capital and marketing expertise.12

  The Swiss story unfolded similarly. Tens of thousands of people had been busy manufacturing cotton textiles long before machines arrived. Merchants, just like in Saxony, gradually organized this production. When inexpensive British yarn began flooding the Swiss market, many spinners became weavers, continuing to work in their homes. Some of the putting-out merchants, however, saw an opportunity to produce yarn domestically, and they brought workers into factories to work for wages on new English-made machines. At first, industrialization did not eliminate manufacturing in the countryside and in homes, but over time its insatiable hunger for capital and ever greater mechanization shifted power to those merchants most capable of building large factories employing wage workers.13

  In Italy as well, Lombardian putting-out systems paved the way for the emergence of factory production in the early decades of the nineteenth century. A few hundred miles to the west, in Catalonia, earlier manufacturing in both the countryside as well as in the city of Barcelona had smoothed the path toward factory production, fueled in part by the new accumulation of capital and in part by the creation of a rural group of wage earners who could be moved into factories. Holland’s mechanized cotton industry was also built upon and embedded within its putting-out networks, as was Mexico’s.14

  Such a system of home spinning could, at least at first, easily adapt to a more mechanized way of doing things. In the late eighteenth century, for example, some spinners began using jennies in their homes or small workshops, as they had done in Britain a few decades earlier. Eventually, however, merchants nearly everywhere would concentrate production in factories, where it could be better supervised, standardized, and accelerated by the use of water and steam power.15

  This early manufacturing often, though not always, also provided access to that other ingredient essential for industrial production: capital. Without access to capital, the new ways of producing cotton were impossible: buildings had to be erected, streams diverted, machines built, workers hired, raw materials secured, and expertise recruited, often from long distances and across national boundaries. The merchants’ most common strategy was reinvesting capital accumulated in the organization of household production of cotton yarn and cloth into small factories. In Switzerland, for example, former putting-out merchants financed the wave of mechanized spinning mills built after 1806. They began with small factories of a few mules and slowly enlarged them. In Catalonia, by the late eighteenth century, artisan producers had accumulated capital in the nonmechanized and household-based textile industry and then used it to expand and mechanize production. In Alsace, the industry drew its capital and entrepreneurial skills from the older merchant and artisanal elites of the city of Mulhouse. In Russia, the Prokhorov family, cotton manufacturers from Sergiyev Posad, a small city fifty miles from Moscow, followed a similar trajectory. Serfs emancipated by Catherine II, they became small-scale merchants, and then, in 1843, focused on calico printing. Shortly thereafter, they started a small spinning mill and their firm grew rapidly. As the age’s most dynamic industry, cotton manufacturing provided ample opportunities for social mobility. Swiss cotton manufacturer Heinrich Kunz started out as a wage worker, but at the time of his death in 1859 he owned eight spinning mills with 150,000 spindles, employing two thousand workers.16

  Mill owners in the United States also often rose from the ranks of small merchants and skilled artisans. Rhode Island’s Samuel Slater had apprenticed himself in England, oversaw other factories, and then migrated to the United States in 1789. Once there, he entered into a partnership with Providence merchant Moses Brown, who was rich from the West Indian provisioning trade and was trying to introduce mechanical spinning in the Browns’ Pawtucket factory. Slater proceeded to build British-designed machines from memory, and in December 1790 the factory produced its first yarn. The energetic Slater soon expanded operations, built additional mills, and eventually accumulated sufficient wealth to create his own company in 1799. By 1806 the Rhode Island countryside was graced by the village of Slatersville.17

  Such successes inspired others: When in 1813 William Holmes, whose “object is to get business for myself,” wrote to his brother John that they should build a cotton factory, he reviewed what a nearby factory had cost and concluded from such observations that putting up a factory large enough to eventually accommodate a thousand spindles would cost about $10,000. He was “ready to join & put in 1000 dollars. A spinner who is a workman can be obtained who will put in 500 more & I can get more subscriptions from this quarter if necessary.” Once started, these humble investors could “so increase the machinery from the profits of the 200 spindles.”18

  As the example of the Holmes brothers shows, capital requirements in early cotton factories could be quite modest, so modest that even in areas in which the availability of capital was limited, such as Saxony, cotton factories might still flourish in a fashion, despite being small, outdated, and reliant on cheap labor and cheap waterpower. Don Baranda, just as modestly, had invested a total of 40,000 pesos, the equivalent of the annual wages of approximately two hundred skilled workers, in his Valladolid factory in 1835. Even in areas with a greater capital availability, expenditures were measured and conservative. In the French department of Bas-Rhin, part of the cotton complex centered in Mulhouse, a cotton spinning factory only required an average capitalization of 16,216 francs in 1801, allowing the thirty-seven factories that existed to employ an average of eighty-one workers. A weaving factory required more—35,714 francs on average, but this was still a modest amount compared to the 150,000 francs needed for a carriage maker, and the 1.4 million francs that an arms manufacturing establishment required. Later, factories would of course grow: during the first half of the nineteenth century, a mechanized spinning mill might cost between 200,000 and 600,000 francs, an integrated factory with spinning, weaving, and printing operations perhaps as much as 1.5 million francs.19

  Reinvestments of capital accumulated in the putting-out industry and small artisan workshops combined with tentative investment from large fortunes accumulated in the sometimes fickle world of trade. In some exceptional instances, indeed, huge fortunes were invested in cotton manufacturing as merchant capital attached itself to industrial production. The most dramatic such move was undertaken by a group of Boston merchants looking for new outlets for capital suddenly and ruinously idled due to the American trade embargo against Britain and France from 1807 to 1812. In 1810 Francis Cabot Lowell traveled to the United Kingdom to acquire the blueprints for a cotton mill. Upon his return, he and a group of wealthy Boston merchants had signed the “Articles of Agreement between the Associates of the Boston Manufacturing Company,” which created a huge
integrated spinning and weaving mill in Waltham near Boston, initially capitalized at $400,000, or a bit more than 2 million francs. The mill focused on inexpensive coarse cotton goods, some of which were sold to clothe slaves, replacing Indian manufactured cloth. (So common did Lowell cloth become among slaves that “Lowell” became the generic term slaves used to describe coarse cottons.) The venture proved hugely profitable, with dividends in most years above 10 percent on the paid-in capital. In 1817, the mills paid peak dividends of 17 percent. By 1823, the Boston Associates expanded further, building more mills in Lowell, about twenty-five miles north of Boston, and creating the largest integrated mills anywhere in the world. This move of American merchant capital into manufacturing marked another tight connection between slavery and industry. Early cotton industrialists such as the Cabot, Brown, and Lowell families all had ties to the slave trade, the West Indian provision trade, and the trade in agricultural commodities grown by slaves. The “lords of the lash” and the “lords of the loom” were, yet again, tightly linked.20

  The Boston Associates were unusual in the size of their investment, but they were not the only large merchants moving capital into industrial production. Swiss merchants by the early nineteenth century began to invest into the Alsatian cotton industry, and also into the emerging cotton complex of Lombardy. Barcelona merchants followed suit. In Mexico as well, the larger share of the capital invested in cotton manufacturing did not come out of the textile industry itself, but instead from fortunes accumulated in trade. Of the forty-one capitalists who opened cotton factories in Puebla between 1830 and 1849, nineteen had been merchants, five landowners, and only three had previously been involved in textiles.21

  Wealthy merchants, many of them foreign, also played a central role in the development of the Russian cotton textile industry, none more emblematically than Ludwig Knoop. Born into a middling Bremen merchant family, Knoop had come to Russia in 1839 as an assistant representative of a Manchester merchant firm, de Jersey, importing yarn. He was only eighteen years old but already quite familiar with cotton manufacturing technology and in thrall to its promise. When, four years later, Britain lifted its ban on textile machine exports, a ban that had from 1786 to 1843 outlawed the export of such things as the spinning mule (or blueprints thereof), Knoop began to bring these machines to Russia, along with English engineers and mechanics; he also imported American-grown cotton and secured credits abroad for Russian manufacturers. He built eight spinning mills between 1843 and 1847, eventually selling those factories to Russian entrepreneurs. Riding cotton’s meteoric global rise, Knoop became Russia’s most prominent industrialist.22

  Such mobilizations of capital were almost always embedded within kinship networks, the Boston Associates, for example, drew on relatives for investments; so did the Fränkel family of Upper Silesia, who built a large spinning, weaving, and finishing empire in and around Lodz, effectively pooling family capital and management skills. The best example of the importance of family to the emerging cotton industry, however, was Alsace, where a handful of families came to dominate a huge local industry for many generations: the Dollfuses, Koechlins, and Schlumbergers among them. These families intermarried. Pierre Schlumberger, one of Mulhouse’s major cotton entrepreneurs, whose spinning mills and printing workshops were valued at 1.3 million francs when he died, had twenty-two children and grandchildren who entered adulthood between 1830 and 1870. Nineteen of them married, fourteen into the Alsatian bourgeoisie, and three into the bourgeoisie of the cotton port of Le Havre. The textile bourgeoisie of Mulhouse thus was extraordinarily cohesive, capable of organizing (in 1826, they founded the Société Industrielle de Mulhouse), and of exerting its power to create a political, social, and economic environment that was conducive to their interests. One descendant, André Koechlin, was aptly dubbed the “Sultan of Mulhouse.”23

  Access to capital and a history in textile production thus were essential to embarking upon the great adventure of manufacturing yarn and cloth with machines, but the catalyst that turned these preconditions into full-fledged cotton industrialization was pressure: namely, the competition from British imports. Indeed, throughout the world, the embrace of mechanized cotton manufacturing was motivated by the need to substitute domestic production for foreign—usually British—imports, just as England had fought so hard to replace a reliance on Indian imports with its own domestic products. By 1800, Britain was flooding world markets, exporting huge quantities of cotton yarn and a smaller proportion of cloth: the value of exports to Europe increased by more than twenty times between 1780 and 1805.24

  THE ENTREPRENEURS

  Russia: Ludwig Knoop and his wife (illustration credit 6.3)

  France: André Koechlin

  Belgium: Lieven Bauwens

  Mexico: Don Pedro Baranda (illustration credit 6.4)

  At first British manufacturers themselves were important agents in the spread of industrial capitalism. Wright Armitage, for example, a Manchester cotton manufacturer, sent his brother Enoch to the United States to sell his factory’s products. In similar ways, McConnel & Kennedy, the Manchester spinners, drew on agents as far away as Hamburg, Switzerland, France, and, in 1825, Leipzig, Belfast, St. Gallen, Thessaloniki, Frankfurt, Calcutta, France, Genoa, and Geneva to sell their yarn. Their business records testify to the ever greater variety of foreign markets they served. While in the 1790s the firm had corresponded nearly exclusively with customers in the United Kingdom, by 1805 it corresponded with business partners in Germany, Portugal, and the United States, and by 1825 with partners in Egypt, France, India, Italy, Poland, and Switzerland. In that year, 30 percent of the firm’s letters went to places outside the United Kingdom, testifying to the global scope of their sales. John Rylands, Manchester’s first multimillionaire and the builder of an “industrial and commercial empire,” started his career as a weaver, turned himself into a manufacturer, and by the 1820s became a wholesale trader, with huge warehouses in Manchester and by 1849 also in London, that supplied the markets of the world.25

  Eventually, however, mill owners focused on manufacturing only and left the selling to a burgeoning group of merchants. Already in 1815 the city of Manchester had fifteen hundred cotton showrooms that made a panoply of goods available to customers. Foreign-born merchants flocked there. Nathan Rothschild, for example, arrived from Germany in 1798 to acquire textiles for his father’s house back in Frankfurt, the first of many German Jews who settled in Manchester. After 1840, a large number of Greeks joined them to serve the needs of the Ottoman Empire and beyond. Merchants located in foreign ports, drawing on the credit of wealthy British merchants and bankers, became further conduits for the sale of British textiles. In Buenos Aires, for example, a rapidly growing group of British merchants sold British yarn and cloth from the earliest years of the nineteenth century, exporting at the same time hides and other meat products. Hugo (Hugh) Dallas, for example, imported such yarn and cloth on commission, and sent “information respecting Colours, Assortments, qualities & prices” to British manufacturers so they could adopt their production to a remote market, where letters could take six months to arrive.26

  Capturing the world market: John Rylands, Manchester, 1869 (illustration credit 6.5)

  And Buenos Aires was not the only place in South America where British merchants traded in cotton. Already by the mid-1820s it has been estimated that ten British merchant houses were active in Montevideo, twenty in Lima, fourteen in Mexico City, four in Cartagena, sixty in Rio, twenty in Bahia, and sixteen in Pernambuco.27 This tidal wave of exports flooded the world’s nonmechanized cotton industries. Switzerland, one of Europe’s earliest industrializers, witnessed significant imports of British machine-spun yarn starting in the mid-1790s. As a result, wages in spinning fell dramatically: if a Swiss spinner was able to buy a five-pound loaf of bread in 1780 with one day’s spinning labor, it took between two and two-and-a-half days in 1798. As early as 1802, representatives of British spinning mills traveled to Switzerland to sell their
wares in even higher volumes, and by the early 1820s no hand spinners were left in the Swiss countryside. Similar incursions happened in Catalonia, in northwestern Europe, and in the German lands, challenging budding capitalists, rulers, and bureaucrats to embrace mechanized manufacturing. Failure to do so, in effect, meant giving up on cotton, and forgoing what had become a significant source of wealth and, increasingly, a precondition for being “modern.” Yet rulers and capitalists in many parts of the world, as we will see, were unable to respond.28

  British competition was a strong incentive to embark upon something radically new, but no manufacturer could do so without British technology. Though the British government tried to hold on to its monopoly, that technology spread rapidly due to active programs of private and government-directed industrial espionage as well as the unstoppable outflow of skilled British workers and cotton capitalists eager to make their fortunes in new lands. Between the invention of new machines in Britain and their spread elsewhere there was typically only a ten-year lag. In Holland and northwestern Germany, jennies and water frames arrived from England in 1780, while Belgian frames came from France, where jennies had been introduced in 1771. The water frame arrived in Lyon in 1782, after being set up in England in 1769. Samuel Crompton’s mule came to Amiens in 1788, just nine years after its invention. Arkwright’s machinery, one sociologist remarks, was a “considerable technological breakthrough” but one that nonetheless could be “easily defused.”29