Enterprise and Entrepreneurs

 

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ENTERPRISE AND ENTREPRENEURS

 

Introduction

 

This chapter describes a number of the features of enterprise during the period. Entrepreneurs were responsible for the organisation of the textile industries. The existence of these industries was an "accident of enterprise" in so far as the primary intention of entrepreneurs was to make money. Aspects of business culture and political economy from the Manchester theatre of enterprise are discussed, and important characteristics are illustrated. The chapter shows that the mercantile elite had a culture that was distinct in a number of ways from that of the gentry and of the poor.

 

Methodologically, many of the arguments presented in this chapter are supported by measurement and quantification. The problem of historical quantification is illustrated by the differing conclusions reached in determining the importance of the textile industry to Manchester when two different proxies are compared: in the section below, occupational structures are used, and in a later section, following the method innovated by Lloyd-Jones and Lewis, the rateable value of property assets is used to measure the impact of the sectoral deployment of fixed capital, leading to different conclusions, which the body of the chapter reconciles by enumerating the problems of an uncritical acceptance of the method of these authors.

 

Capital and the Entrepreneur

 

The distinguishing feature of the capitalist in the period is the organisation and deployment of capital. This section considers the features and importance of the different capital components in the industry, and illustrates the importance of aspects of business culture, specifically the intangible cultural feature of "reputation" in procuring capital and credit during the period.

 

The various production processes involved in the manufacture of textiles were controlled by capitalists. In the finishing processes they engaged dyers and printers to work on the premises. The actual processes would be undertaken on commission. In 1790 such a person offered his services "Joseph Wood, from London. Silkdyer, Scourer, and Finisher, Takes in... the following Articles, and Dyes, Cleans, and Finishes them in the neatest Manner". [1]  While some dyers operated on a small scale, as for example did John Bound, who's dye house was assessed at £6 in 1797,  this system of organisation appears, on the whole, to have resulted in factory-style system: print houses engaged large numbers of workers (many of whom were pauper apprentices) and buildings were specially given over to the processes, dedicated plant sometimes being necessary. [2] In 1797, the dyehouses of John and James Entwsitle, and Thomas Hayle, were assessed at, respectively, £67 10s and £86 10s, which compares with all but the three largest factories in the town in the same year (although there were 12 warehouses or houses and warehouses assessed in excess of £86 at that date). [3] These elements of the finishing processes may, indeed, have been the first to require large amounts of fixed capital, and have been the first to gather together large numbers of workers under a single roof. In 1752 Messrs Walker, Boid and Wasdall announced their intention "to carry on the Business of BLEACHING at Collihurst, near Manchester, where all sorts of Linnen Yarn, Thread, Dutch and common Tapes, and all Kinds of Linnen Cloth may be done in the Dutch or Irish Method..."  Four decades later, the assets of John Moss, a fustian dyer, contained "All those large and convenient Dye-houses, Stove-houses, Vatt Shades, and other Buildings... now used in the Dying Business. And also that newly erected Enginehouse, and a very powerful Steam Engine therein". [4] Similarly, two calendar houses were offered for rent with "The Fixtures on the Premises which are in excellent Condition, consisting of Hot, Cold and Chest Calenders, &c. Presses, one Horse Cart, and other Utensils suitable for the Check and Fustian Calender Businesses". [5]

 

That large numbers of people were employed by the printers and dyers is shown by the frequent advertisements which appeared offering rewards for the recovery of runaway apprentices. In October 1790, Haworths and Smith had lost 56 of them and a further ten were imprisoned, in November, Peel, Yates and Co had lost 76 printers, cutters and drawers. [6] As with spinning, the supervision of large numbers of operatives could be delegated by the capitalist to specialist managers. In 1799, a printer sought "a Person capable of conducting the Printing Business, more particularly to overlook the Block Printers and Cutters". [7] Block printing, probably with wooden blocks, was the traditional method of printing a pattern on cloth. The advertiser also sought "a Person accustomed to Cylinder Machine Printing, to work one made by Parkinson", illustrating that the new method of printing using rotating cylinders was in use in the town by the close of the century.

 

Both factories and warehouses were subject to the pressures of the market and other instabilities. The contemporary Manchester press was littered with announcements of the bankruptcy of different merchants and spinners. Part of the problem was that the industry was, to a considerable extent, built on a foundation of easy credit. Aspiring merchants would buy warps and weft on credit, pay weavers cash on completion, and then extend credit to the purchasers of the finished cloth. The merchant could, in theory, expand indefinitely, merely having to ensure that the credit extended by him did not exceed the credit extended to him: a contemporary wrote "I believe this maxim is held out to a tradesman, never to give so much credit as he takes, by at least a third part." [8] Over-trading, which amounted to the same thing, could also cause bankruptcy: "a tremendous shock convulsed the trade in the year 1788, from the failure of Livesay, Hargreaves, and Co., and some others in the trade. These failures were occasioned by an over supply sent to France after the commercial treaty..." [9] This company was engaged in the manufacture and printing of calico, and was based in St Ann's Square, one of the more fashionable and prestigious parts of the town, suggesting it was one of the bigger firms.

 

There has been a considerable debate about the importance and nature of capital formation during the course of the Industrial Revolution. This debate is particularly important in the context of the growth of the "lead sector", the cotton textile industry. In the case of Manchester there were two principal activities, manufacturing and merchanting. The former potentially required large amounts of fixed capital, for the construction of factories and the purchase or building of machinery. Berg estimates that, in 1788, each of the purpose-built Arkwright factories required over £3,000 of fixed capital. [10] Samuel Oldknow's mill at Mellor was even more expensive (though it was probably one of the largest in the country). The machinery alone employed in the mill cost £16,000. [11] Pollard has noted of the period after 1760 "what was noteworthy in the next two generations was, not so much the absolute... growth in the quantity of capital, but a change in its composition: the emergence, for the first time, of large concentrations of fixed capital." [12]

Capital costs were, however, important in some of the finishing processes. The most common method of bleaching during the period involved exposing woven cloth to the sun on tenterhooks in fields. This process required the rental of the land (and incidentally removed the field from agricultural use for part or all of the year). The process of dyeing and, more especially, calico printing involved extensive and specialised fixed assets.

 

However, the capital costs were often not borne by the entrepreneur. Oldknow rented the factory building, at a cost of £1,600 per annum, and mortgaged the machinery, at the (high) interest rate of 10%, costing a further £1,600. Many of his transactions were done on "the ladder of credit", involving bills to be drawn in several months time, resulting in it being possible to acquire raw materials without providing cash up front. By far his largest non-material cash flow was the factory labour cost, at almost £5,000 per annum, but here again, during the early days of his factory operation, he had set up a truck system, whereby he issued vouchers for redemption at a local shop, where the costs were somewhat higher than elswehere, in effect buying himself yet more credit. Oldknow's example should not obscure the fact that some manufacturers, such as the Peels near Bury, did invest personal fortunes in constructing industrial plant, in this case a manufacturing and printing works. [13]

 

In the case of the merchant and the more modest trader, the importance of fixed capital is even less. In the hypothetical cost structure in Table 6, the merchant buys raw materials on credit. He pays the weaver on delivery of the woven cloth, and extends credit to the purchaser of the cloth, as follows:

 

 

Transaction/Cost

Proportion of     Sales Price

Financing Method

Raw Materials

15%

credit taken (eg 6 months)

Weaving

20%

credit given (materials loaned to weaver eg 0.5 month)

cash payment on completion

Marketing/ storage

15%

assets tied up (eg 0.5 month)

Sale of Cloth

-

credit given (eg 4 months)

 

 

 

Table 6. Hypothetical Cost Structure of Master Manufacturer.

 

The table shows that if a manufacturer bought £150 worth of raw materials on the 1st of January, and had them delivered to his weavers the same day, they would be back into his warehouse by 15th January, at which point he would have to pay out £200 cash to the weavers. On February 1st the goods would be sold to the purchaser, a further £150 of costs having been incurred in storage and marketing, at which point the manufacturer would extend £1000 of credit to the buyer. The debt would be repaid on 1st June, one month before the manufacturer is due to repay the supplier of the yarn. The manufacturer would have made £500 cash "profit" on the transactions, and if that cash were used to pay weavers, a further £375 worth of yarn could be bought on credit, which would yield a further profit of £1,250, in the above cost structure. In turn this could finance the weaving of £938 worth of yarn, and a further profit of £3,125.

 

After three years of the hypothetical example, assuming constant reinvestment, the manufacturer, at month 4 in the cycle, would owe £14,648 and would be owed £97,655, anticipating a "profit" of £48,828. Given the enormous sums of credit extended and received, a sudden credit squeeze arising because of, for example a bank failure, or the failure of a large mercantile house, would result in a massive contraction of the operation. In the example, if the manufacturer received his £97,655, and after paying his raw material debt, was then told that credit could not be extended, and cash was needed for future purchases, then he could only buy raw materials from his cash profit, but would also have to pay weaving and marketing costs. He would only be able to buy £3,662 worth of raw materials, and would make £12,207 profit on this, presumably passing on the credit squeeze to the purchaser. This would increase the frequency of the cycle because he could immediately buy more raw materials, the "bottleneck" becoming the time (one month in all) taken to weave and market the cloth rather than that taken by the purchaser to pay his debt (four months). The manufacturer would naturally seek to increase the speed at which the cycle was completed, because each cycle generated a return on the investment. Certain textile processes, such as bleaching, and perhaps printing, could increase the time each cycle lasted, resulting in  working capital being tied up, sometimes for considerable periods.

 

That such fortunes, as the table suggests, could be made is shown by the accumulated profits of the firm of Entwistle & Sturtevantz.[14] John and James Entwistle commenced a partnership in May 1780, investing £5,000 in cash and £16,254 in business assets. In January 1791, the partnership's capital account stood at £99,979. This represents a rate of capital growth of 35% per annum. In January 1791, a new partnership was formed between the old partners and James Sturtevantz. This partnership was dissolved in September 1798, by which time profits of £176,440 had been made. This represents a rate of capital growth of 23.5%. This lower rate of capital growth is probably reflective of the more difficult trading conditions of the 1790s, when foreign markets were inaccessible or uncertain for periods of time. Some sort of partnership between the three pre-existed the formal 1791 agreement: the 1788 trade directory describes "Entwissles & Sturtevant" as check and fustian manufacturers. In 1797 the rate book shows them occupying a dye house on the river Medlock, assessed at £67 per annum. [15] By 1800 the trade directory described them as "merchants". Such a rate of capital growth may have been exceptional during the period: Radcliffe describes John Entwistle as "the greatest merchant in Manchester... decidedly the most industrious and clever tradesman in the town." [16]

The free availability of credit, and its possible consequences, was debated at the time. One critic of easy credit wrote that, whilst the new trader would begin with good intentions, and think about his creditors and try to protect their interests by not overextending what he borrowed, or bought on credit, after a while he would become complacent, and might borrow ten times the value of his possessions, if "his capital be increased to 1500l, he would not hesitate at incurring debts to the amount of 15,000l... His situation becomes perilous in the extreme. He is sensible to the most trifling variations of the market...". [17] This tendency should be particularly noted by "our cotton-spinners, manufacturers and printers, [who] have been led to become over-traders to an extravagent degree, by improvidently employing such an unproportionable sum from their several capitals in the erection of buildings, machinery, &c. that the money they have reserved for the purchase of the raw materials, for which these preparations were intended, has been totally inadequate to the purpose..." [18] This was not a new problem; eighty years earlier, Defoe had complained of the "modern custom... to have tradesmen lay out two-thirds of their fortunes in fitting up their shops", which he regarded as a foolish extravagance, and which parallels the complaint of the Townsman. [19]

As well as trade credit, the Bill of Exchange was much used by Manchester merchants. Frequent advertisements appeared in the press seeking the recovery of lost or stolen bills. Their use is explained by the Townsman. "Bills of Exchange to be paid in cash at the expiration of a certain time, mostly two or three months, are reciprocally accepted in lieu of payments immediately made in the coin of the country... A manufacturer in Manchester has money owing him by a merchant in London, and he draws a bill upon him or... requests him to pay to his order a certain sum; the drawee in London, in his hand-writing on the draft, accepts the justice and legality of the debt." [20] The bill thus passes into currency, and can be endorsed by the drawer and passed on to another, either at a discount or at face value.

 

The expansion of the Manchester textile industry was very largely dependent upon a balloon of credit, surrounding a kernel of hard money. During business crises, there could be a collapse of confidence, exacerbated by the natural insecurity of the middling sort (discussed in the Cultures of Manchester), which could lead to credit being called in, and pre-existing sources of credit drying up. This could lead to bankruptcy. There were a number of business strategies which could be used by a merchant-manufacturer to avert bankruptcy. The most obvious was to "abate" subcontractors, such as weavers, printers, dyers, etc., and try to weather the storm. This would reduce outward cash flows, but, obviously, pass on the problem to the subcontractees, and probably ultimately to the Overseers of the Poor. The unique versatility of the sub-contracting system which characterised textile manufacture, and the absence of large immobile fixed capitals made this possible. For the factory-manufacturer the problem was more acute. It was possible to abate those working by the week, or for piece rates. This option was not available for those factory-masters who relied heavily on apprentices (a quarter of Oldknow's factory labour force came into this category). In addition to this, although the personal capital of the entrepreneur was not tied up in industrial plant, rental payments had to be made on a regular basis to pay the loan costs of the plant financing. This fundamental difference between the financing of merchant-manufacturing, and factory-manufacturing may have created a bias to bankruptcy on the part of the latter production option.

 

Changes in the Capital Structure

 

The deployment of fixed capital is an issue which has taxed the minds of economic historians since the creation of the discipline. This section uses a modest version of the technique used by Lloyd-Jones and Lewis to show the relative importance of trade and production in the economy of Manchester during the period 1815-1825, by an estimate of the relative amounts of fixed capital invested in each sector. They used rate books as a proxy measure to determine the amount of fixed capital employed in different trades, and specifically the proportion used in the production versus the merchanting sides of the trades. They therefore used fixed capital as a measure of economic importance and this contrasts with that used in the opening section of this chapter, that of economic structure. The conclusion which is reached using the Lloyd-Jones and Lewis measure is in marked contrast to that reached using the occupational structure measure, and this section attempts to reconcile the two measures.

 

Returning to Manchester and its role in this economy, it has been suggested that the mercantile warehouse was at the centre of the system. At the latter end of the period, however, the new cotton spinning factories appeared in the town, and came to be an important feature thereafter. A great deal has been written about the relative importance of production versus trade in Manchester's textile industry, the warehouse primarily a unit of trade, and the factory a manufacturing entity. Table 5 shows the relative importance of factories and warehouses, in terms of both number and rateable value, in 1801, by the rating district.

 

District

W'houses

 

Factories

 

Other

 

No

% RV

No

% RV

%RV

 

 

 

 

 

 

1.00

0.00

0.00

30.00

20.60

79.40

2.00

0.00

0.00

7.00

10.50

89.50

3.00

34.00

7.40

2.00

0.60

92.00

4.00

7.00

4.10

7.00

6.90

89.10

5.00

51.00

11.30

5.00

3.20

85.40

6.00

352.00

54.60

0.00

0.00

45.40

7.00

5.00

2.50

13.00

18.30

79.10

8.00

39.00

19.00

0.00

0.00

81.00

9.00

272.00

38.40

0.00

0.00

61.60

10.00

4.00

29.80

5.00

33.40

36.70

11.00

15.00

5.70

6.00

26.50

67.70

12.00

46.00

27.20

0.00

0.00

72.80

13.00

18.00

10.80

5.00

7.60

81.60

14.00

5.00

2.00

1.00

0.40

97.60

 

 

 

 

 

 

Tot

848.00

20.30

81.00

6.30

73.40

 

 

 

Table 5. Number and Rateable Value of Factories & Warehouses, Manchester 1801 [21]

 

The Table shows the relatively smaller number of factories as compared to warehouses, although the mean rateable value of factories was more than three times greater than that of warehouses (£59.5, as compared to £18.3). [22] The number of factories had been increasing dramatically during the 1790s. In 1797, there were 59 factories in the Rate Book and in 1798 there were 61, although at least six of these were empty.[23]

 

The rate books therefore confirm Lloyd-Jones and Lewis' assertion, of a later period, that Manchester had more commercial property devoted to the warehousing and marketing of textile produce than to its production. They declare "Manchester in 1815 was a warehouse town.." [24] This was true of Manchester in 1801, throughout the 1790s, and certainly of the 1750s. However, a number of points must be made. The geographical entity that was Manchester was not economically self-contained. The section above discussing, inter alia, proto-industrialisation, has shown that a great deal of textile production took place in the townships neighbouring the town, and that the occupational structures of these townships may well have been dominated by weavers, or combined weaver-farmers. The warehouse was the organisational hub of this production system, and a good case can be made to suggest that the role of the warehouse, whilst it encompassed marketing, also included the organisation, or subcontracting, of textile production. Secondly, Table 1, showing the occupations of grooms from the town married in church during, for example 1799, further shows that almost a quarter of the adult male population may have been weavers. Most weaving activity probably took place in the home, which must be regarded, partially at least, as a productive property asset in the same sense as factories. If allowance were made for this, then the rateable value of property used in textile production would increase by up to £3,000.  [25] This would still leave the bulk of commercial and quasi- commercial property in the "warehouse" sector. A final point is that measuring the property values engaged in particular aspects of the production chain may not be the best method of determining the economic significance of a particular activity. Whilst most merchants would seek to keep their working capital, or stock, circulating, and would hope to sell shortly after buying, one of the functions of the warehouse was to store cloth before it was sold. This would inevitably be more demanding of space than factory spinning, most spinners having separate warehouses for their completed product. Early modern economic historians tend to use occupational structure proxies as an indicator of economic importance: in the case of Manchester, Table 1 suggests that throughout the period, a relatively insignificant proportion of the population were employed in warehousing or distribution, whereas a much greater proportion were employed in weaving, spinning or finishing cloth. [26]

Business Cycles

 

This section illustrates the precarious nature of business during the period, and acts as a counter to the "March of Progress" school of history usually associated with the inventors and innovation historians, by illustrating the set backs which occurred to business in Manchester during the period. A later section shows how the impact of business cycles was responsible for one of the central features of mercantile culture during the period: its perpetual insecurity.

 

Manchester's economy was subject to periodic depression. During the period under study there were four major depressions: 1772, 1788, 1793-5 and 1802. The 1772 depression was noted by a contemporary: "There has been sad work in Manchester of Late, several of the Manufacturers are become Bankrupts and it is thought more will be er' long." [27]  The one of 1788 "The late hurricanes [of commerce] have overwhelmed all Credit and Trade too... Houses are stopping here that were never suspected & we hear the same complaints from different parts in the country." [28] That of 1793-5, "The stagnation of business, since the war, has induced many thousand manufacturers to enter his Majesty's service". [29] Bamford said that the French Wars "deranged both money transactions and mercantile affairs. Banks stopped, payments were suspended and trade was at a stand." [30]

The likely causes of these trade recessions are twofold: firstly war, certainly in the case of the 1793-5 depression, closed European markets to the town's manufactures, secondly, there is evidence of a flooding of the export market with raw cotton preceding the later recessions, thus reducing demand for finished textile products manufactured in Britain. In 1787, exports of raw cotton wool increased from the previous year's figure of just over 323,153 lbs, to over a million pounds. In 1792 there was a similar increase in re-exports, from 363,442 lbs, to almost 1,500,000 lbs. This level of re-export continued until 1796, when the level of re-export halved from that of the previous year. The year 1800 saw a fivefold increase from the level of the previous year, to almost 4,500,000 lbs, and whilst this was not sustained, re-exports remained very high until 1804, when they plummeted to a third of the previous year. [31]

The consequences of these recessions were threefold. The commentators from the mercantile interest saw the bankruptcy of trading houses, and the consequent loss of capital, as the result of the collapse of demand leading to credit squeezes. The second effect was the "abatement" of weavers. Oldknow's London agent, prior to the onset of the 1788 recession, advised him to reduce the number of weavers. [32] During the depression which followed the onset of the war with France, weavers in the Manchester region were made to work short-time, and even by 1795, "constant and regular employment cannot be procured by all who are inclined to work." [33] Even this limited sustenance of the Manchester industry was probably largely a result of the merchants reorientation of their marketing efforts away from the European markets to the growing one of the American states. The third consequence was to change the town's occupational structure. Eden claimed that many "superfluous labourers" had joined the army or navy, and therefore reduced the burden on the poor rate. A Bolton weaver said that many woollen weavers had been particularly badly effected during the war, and had changed to weaving cotton instead. [34] The continued presence of soldiers in Manchester throughout the period (see Table 1), may have been fortuitous in absorbing under-employed male labour during the period, especially as it probably increased during times of war, when foreign market access would be restricted and trade recession would set in. Ogden points out that the end of a war could cause a depression in some branches of the textile industry: check was the main textile used in the seafaring wear of sailors, and the Warrington sail cloth industry was largely dependent on war for its success.

 

The textile business was, therefore vulnerable to a number of external shocks, and to crises of confidence causing a collapse of credit. There is also evidence that a flooding of European markets with raw yarn led to periodic depressions within a short time.

 

Supply of Raw Materials

 

One important function of the entrepreneur was to procure raw materials for the manufacturing process. The origin of raw materials, in this context of cotton and spun yarn, has only been given the scantiest attention in previous studies, but it is crucial to know from where Manchester's supplies came in order to understand the impact of war and other events on the industry during the period. Chapman describes the origins of the raw materials "The cotton was imported from India by the East India Company and from Turkey by Levant merchants while linen yarns largely came from Ireland, Hamburgh and the Baltic ports." [35] The importation of yarn via Hull from Pillau, Riga, and Konigsberg were advertised in the Manchester newspapers in the 1790s.[36] That this port was used to service the Manchester market is confirmed by Radcliffe's reference to a man from Berlin and another from Copenhagen buying Manchester yarns and exporting them back home via Hull. [37] The Trent and Mersey canal had opened up a waterway between Manchester and Hull as early as the 1760s, to facilitate the importation of goods destined for, and export of goods from, Manchester, it being a more direct route to northern Europe than that provided by Liverpool. Northern Europe appears to have been a major source of yarn for the warps of cotton goods, during the earlier part of the period. With regard to the period before 1780, "All the pillows, jeans, jennets, and callicoes... most of the cords and thicksets, and many velverets, were made with warps of Hamburgh yarn." [38] This was still being sold in the town in 1790, but Manchester's demand for European warps declined during the 1780s because of innovations in domestic spinning, which allowed the local production of better quality cotton warps. [39]

 

Chapman neglects the importance of the West Indies as a source of raw cotton. This importance is confirmed by the inordinate interest in the Manchester press for "Plantation News", during the period. The growth of the industry meant that "the importation of Cotton from our West-India islands was augmented-- so that, from our exports and imports, Liverpool increased in proportion." [40] Raw cotton was also imported from America, and from Asia. An advertisement from 1790 offers for sale 400 bags of St Domingo, 10 bags of West Indian, 15 bags of Smyrna, and 30 bales of fine East Indian cotton. [41] In the case of other textiles, large amounts of linen yarn, and cloth, were imported from Irish ports to Liverpool throughout the period.

 

The scale of imports of cotton increased considerably during the period. Just over five million pounds were imported in 1781, but supplies were almost certainly interrupted by the conflict with America: in 1782 almost twelve million pounds were imported. By 1800, fifty six million pounds were imported, and this level of imports remained typical of the decade. [42]

The cotton trade was dependent on the West Indies and the Americas for its supply of raw cotton, and on northern Europe for spun yarn, though dependency on the latter decreased as Manchester came to spin its own yarn in the factories. As demand for cotton textiles grew, and as external shocks closed down sources of supply, merchants had to seek out new producers of raw materials.

 

Mercantile Culture

 

Mercantile culture contrasts noticeably with the culture of the middling sort throughout the period. Aikin provides a four-stage model of  the changing mercantile culture, over a hundred years, breaking it up into four periods. "The first is that, when the manufacturers worked hard merely for a livelihood, without having accumulated any capital. The second is that, when they had begun to acquire little fortunes, but worked as hard, and lived in as plain a manner as before, increasing their fortunes as well by economy as by moderate gains. The third is that, when luxury began to appear, and trade was pushed by sending out riders for orders... The fourth is the period in which expense and luxury had made a great progress, and was supported by a trade extended by means of riders and factors through every part of Europe."[43] 

 

What was seen as immoderate display was regarded warily by other members of the middling sort "A young manufacturer about this time [c. 1720] having a valuable customer to sup with him, sent to the tavern for a pint of foreign wine, which next morning furnished a subject for the sarcastic remarks of his neighbours." [44] Percival mocked the frugal living of the Manchester tradesmen, in language reflective of the slight he felt had been done to him by this arriviste group: "I wonder what any country gentleman can be supposed to envy them for ! is it their houses?... with warehouses under, and warping-rooms over, with a back-side equal in quantity of inches to the back-sides of their family...".[45] However, even by the mid-1750s, there were some signs that the traditional frugality was giving way to a more conspicuous consumption, based on aping the gentry. Percival continues, "Is it their equipages ? [with] the calendar-lad for coachman, it must set an spectator laughing at the grotesque, did not the honest horses, by hanging down their heads, shew that they were ashamed of their employment." [46]

 

The home remained the site of work for most traders during the period, although the wealthiest had managed to achieve a separation of home and warehouse. Advertisements for houses for sale included references to adjoining warehouses, counting houses and cellars. Many of the properties listed in the town's rate books in the closing years of the century were for a "house and warehouse", or occasionally a "house and factory".

 

It is appropriate to ask if the new mercantile elite displayed paternalism to their workers, or the poor in general. Davidoff and Hall, studying the language of middle-class literature during the period conclude "Wives, children, servants, labourers, all could be described in the language of paternalism as the dependants and children of their father, their master, their guardian." [47] There is indeed evidence of a form of paternalism of this sort in Manchester. Rasbotham presents a model of an organic society, with a bond of common interest: "it is as much for the advantage of the workman, that trade shall be in so flourishing a state, as to enable his master to provide him with good work, and good wages. The benefit therefore is mutual. Their real interest is the same... It is with men in society, as it is with the parts of the human body. If one member suffer, all the rest suffer with it." [48] Rasbotham, whilst addressing the poor, was not from the mercantile class, but was a member of the gentry, with frequent relations with Manchester, as one of the local magistrates.

 

As regards the paternalism of the manufacturers themselves, there was the occasional assurance that the health and morals of apprentices would be looked after, but accounts of former apprentices suggest this was not a priority of the early factories. The recorder of the account of Robert Blincoe, an apprentice at a Derbyshire cotton mill, wrote of the mill's owner "Mr Needham stands accused of having been in the habit of knocking down the apprentices with his clenched fists... To the boys, he was a tyrant and an oppressor. To the girls the same with the additional odium of treating them with an indecency as disgusting as his cruelty was terrific." [49]  Most factory masters, such as Samuel Oldknow, were rather more concerned by the problem of discipline. Oldknow declined the offer of a 19 year old apprentice from the London Foundling Hospital, "for should she have anything bad in her temper and disposition, it is sure to infuse itself throughout all the Junior class, to the great detriment of good order." [50] There was enormous involvement in the various charities and subscriptions which appeared in Manchester throughout the period, with the details of subscribers and the amounts given showing prominently in the Manchester newspapers, the Infirmary subscriptions of the 1750s being perhaps the biggest. The charitable activities of the middling sort gave opportunities for patronage. When the estate of David Holt was sold, it included cottages for his workers. Aikin says of Robert Peel's calico printing factory near Bury: "The premises occupy a large portion of ground, and cottages have been built for the workmen, which form streets, and give the appearance of a village." [51] Radcliffe was concerned to show that, whilst he had been commercially successful, "it had not been got by 'grinding the face of the poor;' for my greatest pride was to see them comfortable; and in every transaction with them, my equals and superiors". [52]

 

There is, therefore, evidence of concern for the poor, rather than overt paternalism, amongst the manufacturers of Manchester. But this must be juxtaposed against the encroachment of market culture, which was growing in importance in Manchester. By the turn of the century, the political economy of Adam Smith was certainly known in Manchester and was sometimes quoted favourably, "The best writers on this subject agree, and experience has fully proved, that all attempts to give laws to manufactures, are erroneous in their principles, and injurious in their effects; the best of these writers appears to be Adam Smith, whose opinion I believe is universally allowed to be sufficient authority." [53] Some of Smith's principles had been a commonplace of the mercantile culture of Manchester as he was writing: "By bringing our goods cheaper and better to market, we open new markets, we get new customers... a cheap market will always be full of customers." [54]

Mercantile Political Economy

 

The manufacturers of Manchester thought that the boundaries of the free market should "end at Dover": "the British manufacturers... are exposed to continual danger and immense losses, by the importation of Muslins and Cotton Goods from the East Indies, manufactured by persons -- the price of whose labour does not even exceed the amount of taxes paid.. by individual labourers in Great Britain." [55] Rasbotham, whilst an advocate of the free national market, with his maxim "Trade, in general, will soon find its own level." [56], was no supporter of the free flow of technical expertise and machinery, and bemoaned the loss of inventors such as Richard Kay, who escaped to France in a cotton bag, after being attacked by the mob for his invention. In the late 1790s, the fear of the loss of workmen and machinery increased "Several very recent attempts having been made to Export the different Machinery used in the Manufactures of this Country, as well as to Seduce and Prevail with Artificers to leave the Kingdom, and by so doing to establish Manufactories abroad, to the Manifest Injury of our Trade...", [57] action must be taken.

 

It is therefore, not possible to describe the commercial culture of Manchester's merchants as "free market", rather, like that of the poor, it was a culture of self-interest. There was a distinct "protectionism" inherent in the political economy of the period. Part of the reason for this may be that many of the manufacturers themselves came from the ranks of the poor, and therefore shared some aspects of a common culture, even though the self interest they pursued could be at odds with that of the poor.

 

The pursuit of their self-interest also led to a great divide in the political economy, or commercial culture of the middling sort. Lloyd-Jones and Lewis have exclaimed "What is interesting in the period 1800 to 1815 is the extent of hostility and conflict between factory spinners and warehouse manufacturers." [58] In support of their argument they cite a number of pamphlets and press advertisements quoted by William Radcliffe, which indeed show a major schism in the commercial interests of these two groups of manufacturers. The chronological parameters of their study have resulted in their not noting the commencement of the public manifestation of this schism. The schism was an established fact by 1788, when there were relatively few cotton spinners in Manchester. A complaint of the Boroughreeve, Constables, and Churchwardens of Manchester, who were predominantly involved in the manufacture or merchanting of check and fustians, referred to "the case with many spinners of cotton... who keep open their shops on the Lord's day for the accommodation of their customers." [59] The complainants prophesied the end of civilised society if the pernicious practice of Sunday working were not discontinued, and advocated the establishment of Sunday schools, a special concern being expressed about factory apprentices. A second assault on the factory interest was made by Samuel Clowes in 1792. Clowes was a member of a well established mercantile family, whose prosperity in the late seventeenth century had enabled the family to buy into land. Clowes compared concern regarding the fate of slaves brought from Africa, (there was a voluble abolitionist movement in Manchester during the late 1780s and early 1790s, which appears to have drawn support from both sides in the factory-warehouse schism) against that of another group of "slaves": "the poor unhappy Persons to whom I allude are Parish Apprentices; and it is somewhat extraordinary that tho' so much Pains have been taken, and so much Money expended to procure Relief for the Negroes, they should have been entirely unnoticed, tho' immediately under our Eyes... Instances, however, as cruel, have appeared, of Apprentices suffering from Tyrannical Masters...". [60] The factory-warehouse schism, therefore commenced a good decade earlier than Lloyd-Jones and Lewis suggest, before the yarn export issue became the focus of contention.

 

One of the most conspicuous features of the culture of the middling sort is its pervading insecurity. The causes of this insecurity are not difficult to enumerate: they were between two

social groups, both of which could be hostile, the Poor posed a physical threat to their existence because of their propensity to riot and enter into combination to raise wages or change working practices. The gentry, in their capacity as magistrates, often sided with the Poor, and there was probably some envy on the part of the middling sort as well. Business failure was an ever-present possibility, and could happen even to the biggest mercantile houses with London connections. There was a consciousness of this fear on the part of both "antagonistic" social groups. Shuttle noted "our Meeting once a Month hath given Offence to some of our Masters, they imagining that We meet to their Detriment." [61] Percival satirises the check makers of the town for imagining a riot; they "may have dreamed of a riot, and have sent an express to the secretary of war before they recovered of the fright, so far as to be sensible it was only a dream." [62]

During times of business failure, the middling sort manifested their insecurity by berating the acquisition of wealth. In 1788, a year of serious depression in the cotton industry, there was an upsurge in Sabbatarianism, and a call for the introduction of Sunday schools for the children of the Poor, an advertisement, signed by, inter alia, the principal merchants and manufacturers of the town, berated the "inordinate lust of worldly gain, which bids defiance to the laws of heaven, and tramples on the most sacred obligations of religion and conscience." [63] Later during the crisis, Samuel Oldknow's London agent wrote to him to "Curse Ambition and Avarice, two Principles that speed ruin and misery... My good friend this should be a warning to every man not to make too great haste to be rich." [64]

Conclusion

 

This chapter has shown the importance of entrepreneurship during the late eighteenth century. Many business enterprises were dependent upon either the marketing and administrative skill or the willingness to take commercial risk of a single individual. It has shown how, using the example of Entwistle and Sturtevantz, this willingness to take risk could be extremely lucrative for the entrepreneur. It has also shown that business cycles and external shocks to the market could result in business failure, especially as a consequence of a credit squeeze, a phenomenon to which the Manchester textile industry was especially prone. It has illustrated the greater importance of working capital to fixed capital to both manufacturers and merchants alike, and has related this to the discussion of economic importance of warehouses initiated by Lloyd-Jones and Lewis. Finally it has concluded that the political economy of both merchant and manufacturer in the Manchester region, while often clothed in the language of Smith’s new economics, was adamantly rooted in self interest rather than dispassionate admiration for the free market.

 


 

[1] - HMM 2030 4th May 1790.

 

[2] - Mancs. Central Reference Library, MFRB 7, Manchester Rate Book 1797.

 

[3] - Mancs. Central Reference Library, MFRB 7, Manchester Rate Book 1797

 

[4] - HMM 2028 20th Apr 1790.

 

[5] - HMM 2017 2nd Feb 1790.

 

[6] - HMM 2052 5th Nov 1790.

 

[7] - HMM 2483 19th Mar 1799.

 

[8] - Fellow Townsman, pp 14-15.

 

[9] - Radcliffe, p 64.

 

[10] - Berg,  1995, p 133.

 

[11] - Manchester Central Reference Library, MF 731. The figures relate to the period Jan 1797.

 

[12] - Pollard, p 299.

 

[13] - Aikin, p 268.

 

[14] - Greater Manchester Records Office, account book of Entwistle & Sturtevantz, B/ENT/8.

 

[15] - Manchester Central Reference Library, MFRB 7. 1797 Rate Book of Manchester.

 

[16] - Radcliffe, p 19.

 

[17] - A Fellow Townsman, 1800, pp 11-12.

 

[18] - A Fellow Townsman, p 13.

 

[19] - Defoe, p 180.

 

[20] - A Fellow Townsman, p 20.

 

[21] - From Rate Book of Manchester 1801, Manchester Reference Library,  MFRB  11. It is important to remember that not all warehouses were involved in the manufacture or sale of textiles. A number were involved in quite different activities. It has not been possible to separately identify the activities of each warehouse.

 

[22] - Total rateable value for factories was £4,816 and warehouses £15,502.

 

[23] - From Rate Books of Manchester, Manchester Reference Library, MFRB 7, 1797, and MFRB 8, 1798.

 

[24] - Lloyd-Jones & Lewis, p 32.

 

[25] - After removing factories and warehouses from the total rateable value of the town, the residual value is £56,172, of which an estimated 90% represents housing. If 24% of households (i.e. grooms married in 1799) engage in weaving, dedicating perhaps a quarter of their home to the loom, etc., then the extra property value of this activity would be £56,172 multiplied by 90%, multiplied by 24%, multiplied by 25%, which equals £3,033. This is, of course, an extremely crude calculation, and is subject to a number of potential errors.

 

[26] - In part, this may be a consequence of warehousemen being drawn from men who have been weavers, but turn to warehousing in later life, thus being less likely to get married than younger weavers.

 

[27] - GMRO, E7/25/2/5, letter from Mr Bailey, 11th September 1772.

 

[28] - Manchester Central Reference Library, MF 731, p 101, S. Salte to Samuel Oldknow, London, July 1788.

 

[29] - Eden, p 351.

 

[30] - Bamford, p 5.

 

[31] - Baines, p 132.

 

[32] - Manchester Central Reference Library, MF 731, p 102, S. Salte to Samuel Oldknow, London, 25th June 1788

 

[33] - Eden, p 357.

 

[34] - H of C 1803, p16.

 

[35] - Chapman, in Rose (ed.), p 63.

 

[36] - HMM no 2502, 30 Jul 1799.

 

[37] - Radcliffe, p11.

 

[38] - Mercator, 1800 (2), p6.

 

[39] - see for example, HMM 2028, 20th Apr 1790, where four hundred bundles of Hamburgh yarn are offered for sale by Ralph Fogg, a cotton dealer.

 

[40] - Considerations of the Present Effects and Future Consequences of an Act Passed in the last Session of Parliament, laying a Duty on Cotton Goods, Manchester 1784.

 

[41] - HMM 2013, 5 Jan 1790.

 

[42] - Baines, p 132.

 

[43] - Aikin, pp181-182.

 

[44] - Aikin, p 188. Aikin goes on to say that home-made wine was the usual fare for entertaining, foreign wine being an expensive luxury. Even by 1768 "the Bull's Head was the only inn in the town where wine might be purchased. Few houses sold spirits." (The Manchester Historical Recorder, [1874], Manchester 1984, p 12.

 

[45] - Percival, pp 9-10.

 

[46] - Percival, p 10.

 

[47] - Davidoff and Hall, p 21.

 

[48] - Friend of the Poor, 1780, p 5.

 

[49] - Brown, p 61.

 

[50] - Manchester Central reference Library, MF 1020, 21st October 1801.

 

[51] - Aikin, p 268.

 

[52] - Radcliffe, p 17.

 

[53] - Anon, Facts and Observations..., Manchester, 1807, p 3.

 

[54] - Friend of the Poor, 1780, p 19.

 

[55] - HMM 2068, Jan 1791.

 

[56] - Rasbotham, p 9.

 

[57] - HMM 2474, 15th Jan 1799.

 

[58] - Lloyd-Jones and Lewis, p 63.

 

[59] - HMM 1920, 1st April 1788. They also complained about a number of other trade groups.

 

[60] - HMM 2121 31st January 1792.

 

[61] - Shuttle, p 7.

 

[62] - Percival, p 20.

 

[63] - HMM 1920, 1st April 1788.

 

[64] - Manchester Central reference Library, MF 731, p 102. 30th May 1788.