# The English Historical Review/Volume 37/The Transition to the Factory System

This article appeared in two parts, both published in volume 22 of this journal. The first part occupied pages 206 to 218, and the second pages 383 to 397.
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The Transition to the Factory System
Three leading contemporary authorities on the early history of the cotton industry and of the factory system—Robert Owen, William Radcliffe, and John Kennedy—agree in attributing considerable importance to the achievements of Samuel Oldknow, who first turned the new spinning inventions to full account by the production of finer cotton fabrics in successful rivalry with the East. A couple of extracts from Robert Owen's autobiography will provide the best introduction to the subject of the present article.
   The first British muslins were made when I was an apprentice with Mr. McGuffog by a Mr. Oldknow at Stockport in Cheshire, about seven miles from Manchester, who must have commenced this branch about the year 1780, 81 or 82; and it is curious to trace the history of this manufacture. When I first went to Mr. McGuffog there were no other muslins for sale except those made in the East Indies, and known as East India muslins; but whilst I was with him Mr. Oldknow began to manufacture what he called by way of distinction British Mull Muslins. It was a new article in the market, less than a yard wide, for which he charged to Mr. McGuffog 9s. or 9s. 6d. and which Mr. McG. resold to bis customers at half-a-guinea a yard. It was eagerly sought for and rapidly bought up by the nobility at that price. …
   This was the once celebrated and most enterprising Samuel Oldknow who it was known had not long before made seventeen thousand pounds of profit in each of two successive years, and who was then generally supposed to be very wealthy, and was considered a great man in the world of manufactures and commerce. He had made these profits in the manufacture of muslins, while he purchased the yarn from the cotton spinners. He thought the spinners were getting great profits, and he was not like many others, content to do well or very well as he was doing,—but being ambitious, he desired to become a great cotton spinner, as well as the greatest muslin manufacturer. He built a large, handsome and very imposing cotton-mill, amidst grounds well laid out, and the mill was beautifully situated, for he possessed general good taste in these matters. In fact he was preparing and had made great advances to become a first-rate and leading cotton lord.
From the first it was clear that, by a piece of almost inconceivable good fortune, the records of Oldknow's previous business as a muslin manufacturer at Stockport had been deposited at Mellor, so that the documents afforded a unique illustration both of the final phase of the 'domestic industry' and of the earliest phase of the factory system. A long and vain attempt to interpret the factory records on the assumption that the fragmentary time-books, wage-sheets, &c., related to the Mellor mill alone, ended in the discovery that part of the records were those of a mill simultaneously erected at Stockport, whilst others concerned a bleach and print works previously established by Oldknow at Heaton Mersey.
Further inquiries in Mellor and Marple, where the tradition of Oldknow's achievements is still very much alive, showed that our interest in the factory and its records had naturally been anticipated by some of those whose fathers or grandfathers had been concerned in its working and management, and who kindly ​placed at our disposal records which had long been treasured as family heirlooms. The whole body of records thus recovered is undergoing careful investigation by a group of students of local and industrial history, and the present article is an attempt to state some of the broader results yielded by a preliminary survey.
Samuel Oldknow was born in 1756 at Anderton, which lies about half-way between Bolton and Chorley in the immediate neighbourhood of Rivington Pike. His father, who died in 1759 aged 25, is described on his tombstone at Rivington Chapel, where he was buried, as 'Samuel Oldknow of Nottingham late of Anderton'. A migration of the family in three generations appears to have taken place about this time to Nottingham, where Thomas Oldknow, the grandfather of our Samuel, and Thomas junior and Joseph his uncles, are found carrying on business. Joseph was apparently a grocer, since he dealt in tea, and Thomas junior was certainly a linendraper. Short as his father's married life had been, Samuel had a brother Thomas and a sister, both of whom lived with him later at Heaton Mersey. His widowed mother returned to Anderton and married John Clayton of Roscoe Low. The records give many glimpses of the Clayton family. We hear of three children, Margery, Sam, and John Clayton, junior, who ultimately succeeded Samuel Oldknow at Mellor in 1827.
Samuel Oldknow was apprenticed to his uncle Thomas the linendraper, and in 1781, when in his twenty-fifth year, was taken into partnership with him. This partnership had lasted scarcely a year when it became the starting-point of a new enterprise. It was proposed that Samuel, whilst retaining his connexion with the Nottingham business, should return to Anderton and set up as manufacturer of cotton goods and fustians. The Nottingham shop would furnish the beginnings of a market, but there was to be a salesroom in Manchester, and Samuel might as a further string to his bow undertake an agency for Nottingham hosiery. There can, however, be little doubt that the production of muslins, which within eighteen months had become the essential feature of the enterprise, was from the first under consideration. In his Early English Cotton Industry Professor Daniels has shown how favourable in 1781 the conditions were to such an undertaking. The disallowance of Arkwright's patent for carding as a result of the trial of that year, and the almost simultaneous publication of Crompton's invention, gave an immense stimulus to the manufacture of the finer cotton fabrics.
The mule was first known as the muslin wheel, and the inventor himself later described it as 'that piece of mechanism that has produced and increased one of the first manufactories in Europe, viz. the fine Muslin and cambric'. In view of the fact that the manufacture of muslins had actually been attempted at Anderton when Oldknow was a boy of eight in 1764, and had failed for want of finer yarn, the inference above made seems irresistible. The fortunate survival of a number of letters, rescued one by one from the factory debris at Mellor, and of two of Oldknow's earliest account-books, with only a page or two missing, enables us to follow in some detail his operations as a manufacturer from his settlement at Anderton in midsummer 1782, up to and beyond the removal of his head-quarters to Stockport in 1784. The first six months were obviously a period of experiment. The weavers whom he was recruiting for his muslin manufacture had at first to be employed on the articles they were accustomed to make. These were the fancy cotton goods of which James Ogden in his famous description of Manchester in 1783 has attempted an enumeration; velverets and velveteens, king's cords and queen's cords, herringbones and buff jennets, dyed pillows and waistcoat jeans, &c. Not until November does the dispatch to three several customers of three pieces of Balassore handkerchief suggest that Oldknow's career as a muslin manufacturer is beginning. During the three months from 24 September (when the record of sales begins) to Christmas about £400 worth of piece goods were sent out. Half of these were disposed of by the Nottingham shop and by a firm of linendrapers in Mansfield, and one of the remaining quarters was taken by Mr. Samuel Mather, who is probably the silk and fustian manufacturer of King Street mentioned in the Manchester directory of 1788. As Oldknow spent far more on cotton than on yarn at this time, he must have found work for a number of small spinners in the neighbourhood of Anderton. He likewise opened an account with Messrs. Peel & Yates for printing and with a fustian calenderer for the finishing of his goods. ​In the beginning of 1783 a new epoch opens in the affairs of Samuel Oldknow. The partnership of uncle and nephew ceases, though the uncle continues to have important financial relations with the nephew and to offer friendly advice. The chief market for the goods produced is no longer found in the Nottingham connexions or even in Manchester. From this time onwards two London firms, S. & W. Salte and Parker, Topham & Sowden, take about two-thirds of the rapidly increasing output of Samuel Oldknow's manufacture. But most important of all it is from the spring of 1783 that Oldknow becomes primarily a maker of muslins. Within three years he was recognized as the first in the kingdom.
Though the detailed record of his sales for this year is wanting, a ledger containing the accounts of his creditors, and an account-book containing a cash account of receipts and payments, a full inventory of his stock-in-trade in August 1783, a list of the spinners and weavers in his employ, and an account of his personal expenses, furnish full particulars of the expansion of his business, and enable us to form a sufficiently clear idea of its commercial and industrial organization. But the central clue to the reconstruction that is taking place is to be found in Oldknow's correspondence with the two London firms above referred to.
Oldknow, who had already improvised a warehouse in Anderton in a building adjacent to the house of his stepfather, had entered in January 1783 into occupation of a salesroom in Manchester on the premises of Mr. Cririe, a merchant in St. Anne's Square, at a rental of £13 a year. Here he accumulated a stock of his goods for show, and rode up weekly at the recorded expense of four or five shillings to push sales and to buy cotton weft and twist. But no sooner were his weavers adequately trained, and a steady flow of muslin products begun, than he discovered that London and not Manchester was the most effective market for his wares. The travelling partners of the two firms of Parker, Topham & Sowden and S. & W. Salte, who were eagerly looking out for the latest novelties in Manchester goods for the spring trade, had prospected a gold-mine in Oldknow's muslins, and each of them was offering to take more than he could produce. Oldknow was in a dilemma. His artistic tastes and his impulsive and speculative temperament urged him to throw himself unreservedly into the manufacture of muslins, but, apart from a possible lack of fine yarn and skilled labour, there were two serious obstacles to the expansion of the business. His output was limited by the smallness of his capital and credit, and the muslin manufacture was liable not only to all the fluctuations of a seasonal trade, but to a sudden and severe burst of competition whenever a large cargo of Indian muslins came into port. Whilst, however, he ​needed considerable advances of capital and the guarantee of a steady market for his goods, he did not wish to purchase these advantages by a complete sacrifice of his independence. A draft of a letter to S. & W. Salte on 22 April shows him cautiously feeling his way in this negotiation. Each of the two firms was willing to make advances of capital, but each bargained for an exclusive agency. Oldknow compromised the matter by dividing the London agency between them, and they continued to take two-thirds of his entire output for a number of years.
Having learnt something of the external relations of the new enterprise we may now turn to consider its internal economy. Ample data for this purpose are provided by the recorded stock-taking of August 1783. But first as regards the warehouse at Anderton, in which the business was centred in 1783, there is an interesting letter, undated, but clearly belonging to a later period, asking the landlord for a lease on the ground of improvements effected by Oldknow probably in 1784. A plan is attached to the letter showing that the original structure adjoining Mr. Clayton's house was 31 feet 2 inches long by 19 feet 6 inches wide, and that the addition made by Oldknow had practically doubled the accommodation at a cost of £90. That an eminent manufacturer who claims to have established a new industry should regard £90 as a considerable outlay shows how small a part fixed capital in buildings or machinery as yet played in industrial enterprise. Although there was not much room in Oldknow's warehouse before it was enlarged, it is conceivable that it sufficed for his stock-in-trade at that time. The whole of his 'Fixtures and Utensils', which comprised office furniture as well as machinery, was valued at £57 17s. 11d. This modest equipment covered all the processes of preparing the warp, giving out the cotton, warp, and weft, taking in, examining, finishing, and storing the cloth.
The warehouse, even before it was enlarged, had apparently separate rooms for giving out and taking in. In the former were four bags of cotton of different kinds, the total quantity being only 234 lb. The cotton of Berbice (77 lb. at 2s.) had hitherto been thought the finest, but that of Brazil (130 lb. at 1s. 9d.) was now thought to be equally good material for fine fabrics. There were also 97 lb. of St. Domingo at 1s. 7½d. and 20 lb. of Smyrna for coarse fabrics at 1s. 4d. Besides this, there were 125 lb. in the hands of twenty-three small spinners employed by Oldknow, and a further quantity given out to a score of weavers who saw to the spinning of their own weft, making a total value of about £50. Carefully sorted out in the cupboards and drawers of this room there lay about a couple of hundred​weight of weft and twist of all counts from twenties to nineties, wound or unwound, and valued at £180. The nine winders had 80 lb. more, but most of the yarn was in the hands of the weavers. Of the sixty-nine weavers employed by Oldknow one was debited only with 2½lb. of cotton and three with a warp apiece. Of the remainder two-thirds had received warp and weft, and one-third warp and wool. In a score of cases the weavers are said to have received with their weft or wool only a third, a half, or two-thirds of the warp, the implication being that they were to provide the rest themselves. The total value of the materials thus given out to the weavers was £261 17s. 11d. But by far the greatest part of Oldknow's assets was to be found in his stock of manufactured goods valued at £812, of which four-fifths were muslins mainly in the Anderton warehouse, and one-fifth other cotton goods mainly in the Manchester salesroom; and in the book-debts owing to him, amounting to £1,407. Against total assets in these various forms of about £2,636 there were Oldknow's own debts, which amounted to £1,548, including a loan from A. Crompton, Esq., of £1,000.
In spite, however, of this favourable balance, the problem mooted by Oldknow in his letter to S. & W. Salte in April of finding capital for expansion of his business had not yet been solved. It is true that both the London firms had given him permission to draw upon them, that is, to borrow money on security of goods not yet delivered; and, if drafts made in round numbers represent such loans, the firm of S. & W. Salte advanced £670, their total payments for the year being £1,387. But such temporary advances, however helpful, did not enable Oldknow to realize his ambitions, and it is clear from later letters that Messrs. Salte were not prepared to invest larger sums for longer periods in the muslin business. The one man who was known to be rendering this kind of aid in other directions was Richard Arkwright, then the recognized leader of the cotton industry, and he likewise had in his hands the main supply of one of Oldknow's chief materials. It is not surprising, therefore, to find the book of sundry expenses recording two visits of several days each to Derby and Cromford in November and December 1783, and three longer journeys, one of them lasting a fortnight, to Cromford and Nottingham in January and February 1784. These long discussions with Arkwright led to business arrangements including a loan of £3,000 at 5 per cent., which was to enable Oldknow to start his manufacture on a larger scale at Stockport. The details of the bargain have not been preserved, but its broad significance is clear enough. The new inventions had endowed certain forms of fixed capital with unexampled powers of production, and the disposal of the surplus thus created gave to the ​possessors of that capital the initiative and direction of new industrial enterprise. Although for some years to come Salte remained Oldknow's chief patron and adviser, it was the influence of Arkwright that from this time onwards determined his career and gradually transformed him from an 'eminent manufacturer' into a 'captain of industry'. This is shown in a letter from Oldknow's brother Thomas, who had from the first been brought into his Stockport plans and had shared the interviews with Arkwright. 'You will naturally suppose', he writes to Samuel on 16 February 1784,
   my thoughts have been considerably employed in thinking of this new employment, but whether a Bleacher or Spinner, I am as yet undecided. The profits Mr. Arkwright seemed to think equally advantageous, though Bleaching in all probability the most lasting. What Mr. Arkwright says with respect to the profits of Bleaching may be true, but cannot say my throat is sufficiently wide to swallow the information for fact. I dont know whether I told you what he said. At least you had not time to consider it properly. I shall therefore repeat it for your better consideration. … He said if I returned £1,200 per annum by Bleaching I should not have above £300 to pay out of it. He further said if you would manufacture 200 pieces per week the Bleaching and Dressing of them would be 2s. per piece that would amount to £20 per week and that I should clear £12 out of the £20. These are profits in my opinion too great for the returns, so great that every manufacturer would be his own Bleacher. However I shall be satisfied if the profits are half as much.
Stockport, when Oldknow set up his manufacture there, had already passed through one phase of the industrial revolution and was just entering on another. Silk-throwing had been carried on as a factory industry for over half a century. A partnership formed in 1732 between three gentlemen of Stockport, two chapmen of Heaton Mersey, and a London merchant, had acquired and improved the water-power of the manorial corn-mill for this purpose. In 1744 a reservoir was constructed on a stream running into the Mersey, and by 1768 half a dozen silk-mills were at work in the town. When, therefore, the new spinning inventions began to be widely adopted the whole framework of the factory system had been erected at Stockport and was waiting to be taken over. Not only water-power and ​buildings but also the child labour could be transferred readily from silk to cotton. Henry Marsland, a cotton manufacturer at Bosden near Stockport, who had been one of the first to set the new spinning frames to work by horse-power, acquired in 1783 the Stockport silk-mill with the manorial water-rights, and became the first large cotton spinner in the town. There were already smaller cotton spinners at work, and Stockport was becoming a seat of machine-making and invention.
The new warehouse having been opened in March 1784 and a connexion already formed amongst the weavers of the district by his manager, on 21 July Oldknow rode over to Stockport, taking with him a £50 banknote and £225 in bills, which was half the purchase money of a house and land situate in the Hillgate, Stockport, belonging to Mr. Giles Walmsley. The other half of the price was to be paid within six months. Fourteen years later, when Oldknow's property at Stockport was offered for sale by auction, it was described in the following terms:
   Lot 1. All those extensive PREMISES, late in the occupation of Mr. Oldknow and now occupied by Messrs. Parker, Sykes and Co., pleasantly situated in the Higher Hillgate, Stockport; consisting of a good House, Stabling, Offices, Garden, and commodious Buildings five stories high, now used for Spinning, and the Manufacture of Muslins and other Piece Goods and has every necessary Convenience for making One Thousand Pieces per Week; the site of which contains about 7,640 square yards, part freehold and part lease-hold for long terms of years. Together with an excellent STEAM ENGINE of Messrs. Boulton and Watts' constructing; and many valuable Fixtures which will be sold therewith.
   Lot 2. Five good, substantial BRICK DWELLINGS, with a Picking-room and Loom-House standing on lands held for ninety-nine years under the Rector of Stockport, adjoining the above.
   The first of these lots is let for £520 a year and the second for £80; making together a neat rent of £600 a year.
It was in these premises or part of them that William Radcliffe, two or three years later, made what he claimed to be the first practical beginning of power-loom weaving. But apart from the application of power in weaving, the factory system in every other aspect had already, as the above notice shows, been applied to the production of cotton goods with spinning as a subsidiary process, by Samuel Oldknow on the same spot. This achievement, which belongs mainly to the years 1786–92, involved such a further acquisition of land, such an increased investment in buildings and machinery, that, at the completion of the process the rent of the property was more than its capital value had ​been at the beginning. It is improbable that more was included in the purchase of July 1784 than the house, stabling, and offices, and a piece of land to be used for extensions, and it would seem that these premises served both as a residence and a warehouse from October 1784, when Oldknow moved to Stockport, till 1786, when he built a house at 'Heaton'. During these two years he was still an eminent master-manufacturer of the old style, differing in no essential respect from the draper or clothier of sixteenth-century England or of fourteenth-century Ghent or Florence. It is therefore desirable that we should bring together such facts as the new records furnish about the organization of his business in its simpler form before the fundamental changes that followed the crisis of 1787–8.
First and foremost he was an employer of weavers. When he moved his head-quarters to Stockport he had no intention of abandoning his warehouse at Anderton, or of relinquishing the assistance of the muslin weavers he had trained there. The list grew from sixty-nine in 1783 to over one hundred and fifty in 1786, of whom all but eighteen were muslin weavers, and from May to November 1785 an average of 370 pieces a month was being dispatched to Stockport by Thomas Swift, the manager at Anderton. At that time the output at Stockport was not so good, either in quantity or in quality, but by the close of 1786 it had reached four times that amount (about 1,600 pieces a month), and the Anderton weaving diminished till, in 1793, there were only forty weavers on Oldknow's list as compared with 340 at Stockport. As, however, the Anderton branch kept up a connexion with from fifty to a hundred small spinners in the Bolton district the value of the yarn sent monthly to Stockport grew from £50 in 1785 to £200 in 1788, and £300 in 1790. The small spinners of the Stockport district (to the number of about fifty) were producing about £400 worth a month in 1786–7 to Oldknow's account, but he must have been getting by that time from Arkwright and other big spinners more than twice the amount of twist and weft supplied by all the small spinners combined.
It was the relation of the master-manufacturer to the small spinners and the weavers that constituted the characteristic feature of the old industrial regime. He was their employer in the sense that he supplied them with practically all their raw material. All the weavers and most of the spinners thus employed were themselves manual workers with a standard of life comparable to that of the modern wage-earner. The weavers had long been organized in friendly societies which were in effect trade unions, and the journeymen spinners had lately followed ​their example. But in two important respects their position differed from that of the organized workers of more recent times. The master weavers and spinners were small capitalists in respect of the implements of their calling, and they stood to their employer in the twofold relation of debtor and of creditor. Normally each had a ledger account opened for him where he was debited on the one hand with the materials given out to him and credited on the other hand with his labour. A ledger of this kind, complete except for the loss of about a score of its initial and final pages, gives a full and continuous account of Oldknow's relations with the weavers of the Stockport district for almost two years after he set up business there in February 1784; and fragments of similar ledgers exist for 1786 and 1790–1 (60 folios). There is also a daily record of the goods delivered by the weavers from November 1786 to April 1787, and complete sets of daily bundles of weavers' pay-tickets for the months of December 1793 and June 1794, from which an account of the output and the earnings of the weavers for these periods can be compiled. A day-book record of the sales of the firm has been recovered which, though in tattered fragments, constitutes a complete account of the output for twenty-seven of the forty-four months between June 1786 and January 1790. Other records that have survived are nine warping-mill books, giving a continuous record of the character of about half the output from 1787 to 1792, several weavers' piece-work price-lists, the accounts of three stock-takings, and an invaluable costing-book which analyses the composition and estimates the cost (including a profit of 20 to 30 per cent.) of a great variety of calicoes, shirtings, and muslins.
By a careful study of all these data it should be possible to give a far more detailed account of the cotton industry before the coming of the factory system than has yet been attempted. All that can be done here is to place some of the broader statistical results of the investigation in relation to our previous sources of information.
The locus classicus on this subject is the retrospective account of William Radcliffe written in 1822, which distinguishes between three periods, (1) before 1770, (2) 1770–88, (3) 1788 and after. In the first period—before the spinning inventions or even the fly-shuttle had come into common use—
The idyllic effect of this account is marred by the reflection that a father and two sons earning 24s. a week would require a family of at least eighteen—wives, children, and aged parents—to card and spin for them, and that the maximum earnings of such a patriarchal group of twenty-one persons would be 60s. per week.
In the second period—from 1770 to 1788—'cotton was become the almost universal material'; the hand-wheels were displaced by jennies, the carding for all but the finer yarn was done upon engines, and the fly-shuttle was generally adopted on the looms, which would thus have a greatly increased output, even though their number (as Radcliffe thinks was the case) did not itself increase during this period. Of the family income at this time Radcliffe tells us nothing, but though the 'inexhaustible demand' for infant and aged labour was gone those engaged in carding and spinning would be earning at least twice the wages of their predecessors. The opening of the third epoch in 1788 was due to 'the mule-twist coming into vogue for the warp as well as weft', which
   put all hands in request of every age. … New weavers' cottages with loomshops rose in every direction, all immediately filled and when in full work the weekly circulation of money as the price of labour only rose to five times the amount ever before experienced in this subdivision, every family bringing home weekly 40, 60, 80, 100 or even 120 shillings per week.
There are strong a priori reasons for treating these figures with critical caution. Writing as a disappointed old man in a time of extreme depression for hand-loom weavers, Radcliffe could scarcely fail to exaggerate the prosperity which had undoubtedly existed in his youth. Whilst our records confirm his recollection of a great boom in textiles for two or three years following 1788, they do not tend to substantiate his retrospective estimate of rise in family incomes, and they show that the boom was succeeded by a severe depression. William Radcliffe, it should be added, was born at Mellor and began his career by supplying warps to Oldknow's weavers.
The Stockport ledger account shows 73 weavers in regular ​work in 1784 and 115 in 1785, and the average earnings in the November of these two years is 14s. 7d. for weavers with one loom, 26s. for those with two looms, and 30s. for those with three. The taking-in book of 1786–7 enables us to identify the number of looms under the management of each small master. There were 300 weavers with 475 looms, subdivided as follows:
| With 1 loom 193 | With 2 looms 68 | With 3 looms 19 | With 4 looms 15 | With 5 looms 2 | With 6 looms 2 | With 7 looms 1 |
| Average weekly earnings of each class: |||||||
| 13s. 11d. | 28s. 7d. | 38s. 4d. | 48s. 4d. | 65s. 10d. |
Unfortunately there is no record of the same completeness for the two years of exceptional prosperity. A considerable fragment of a weavers' ledger for July–December 1790 enables us only to ascertain the average earnings of a score of individual looms, a few of which were engaged on calicoes and shirtings and the rest on muslins. One weaver of figured muslins earned as much as 33s. a week, and the earnings of three others were 23s. 9d., 23s. 1d., and 20s. 3d., but the average of all the twenty weavers is only 12s. 7d. A complete set of weavers' pay-tickets for June 1794, when trade was very bad and Oldknow was just about to abandon the muslin manufacture, and representing 180 weavers and 223 looms, shows the average earnings to have been:
| 1 loom | 2 looms | 3 looms | 4 looms | |
| 145 | 26 | 4 | 3 | weavers. |
| 7s. 1d. | 14s. 8d. | 19s. 7½d. | 23s. 6d. | earnings per week. |
If we accept the estimate of Radcliffe for 1770 as a base, our records show at the end of the second period, i.e. from 1784 to 1787, an increase of about 50 per cent, in the earnings per loom. They do not substantiate any marked increase in earnings per loom after 1788, but are not inconsistent with a considerable increase in family earnings due to extended employment in 1789–90. This latter, indeed, may be regarded as certain, but it cannot have been on the scale represented by Radcliffe, and it is very improbable that the earnings of even patriarchal households of two or three families amounted to 6 or even 5 a week.
G. Unwin.
* ↑ The Life of Robert Owen, written by himself, vol. i. p. 25.
* ↑ Ibid., p. 40. Cf. Kennedy, Brief Memoir of Samuel Crompton, pp. 339–45. The Gentleman's Magazine for November 1828, pp. 469–70, contains an obituary notice of Samuel Oldknow, and the late Mr. Joel Wainwright's Reminiscences of Marple gives local traditions and several letters addressed to Oldknow by S. Salte.
* ↑ I am indebted to Mr. Arthur Hulme of Marple, who discovered the records and placed them at the disposal of the University of Manchester, for the classification of an immense number of documents, for the transcription of a great many letters, and for active co-operation in every part of the investigation. Mr. Hulme is using the material for a social and economic history of Marple and Mellor. We are both under great obligations to Mr. E. Furniss, agent of the Arkwright estate in Mellor; and to Mr. J. Taylor of Marple Ridge and Mr. H. Wheeldon of Didsbury for the loan of records.
* ↑ Daniels, pp. 101–2, 128–9, 167–9.
* ↑ Under the heading 'An Old Romance', the Bolton Journal and Guardian for 13 January 1922 cites a letter in the Manchester Courier of 18 April 1829 signed Civis which claims that the muslin manufacture was permanently established by Thomas Ainsworth at Bolton in 1780.
* ↑ Cf . Ogden's Description of Manchester, p. 88, and Daniels's Early History, p. 38.
* ↑ In Defoe's Tour (edition of 1769), Stockport is described as 'inhabited by a great number of gentry and well filled with warehousemen who carry on the check, mohair, button and hat manufactures. Here the raw silk is chiefly thrown and prepared for the Spitalfields weavers by six engines the buildings of which are of prodigious bulk, one of them containing above 45,000 movements which fill the spacious room up to the fifth storey and are all put in motion by one wheel that goes by water. … At this place poverty is not much felt except by those who are idle, for all persons capable of tying knots may find work in the silk mills, which employ near 2,000 people and where children of six years old earn a shilling a week and more as they grow capable of deserving it.'
* ↑ Higinbotham, History of Stockport, ii. 317–18.
* ↑ Wheeler, Manchester Chronicle, 19 October 1782, letter signed Senex; and Manchester Mercury, 18 February 1783, advertisement of W. Mycock.
* ↑ Daniels, pp. 44–55.
* ↑ Manchester Mercury, 21 January 1785. Advertisement by Friendly Society of Cotton Spinners of Stockport.
* ↑ The weaver was never, and the spinner seldom actually, debited in cash value with the materials. The amount of the cotton or yarn delivered was placed to his debit, no doubt with a view to its being recovered, if necessary, at law. The establishment of small debt courts, with the employing class as assessors, is one of the most significant developments of the period. Cf. 17 Geo. III. c. xv.
* ↑ Radcliffe, The Origin of Power Loom Weaving, pp. 59–60.
* ↑ Ibid., pp. 61–2.
* ↑ The above statistics, drawn from the Oldknow records, were furnished by the calculations of Miss F. Collier, M.A., in her thesis on 'The Family Income and the Family Economy of the Working-Classes in the Cotton Industry during the Industrial Revolution', and by Mr. G. Taylor, B.A., who is preparing a thesis on 'The Handloom Weavers of the Stockport District, 1784–94'
Part II
In passing to an account of Oldknow's relations with the spinner a few words on technical matters are unavoidable. The coarser and finer varieties of cotton yarn are distinguished as low and high counts respectively, the number of the count representing the number of hanks of yarn to the pound weight. For the weaving of muslins comparatively high counts both of warp and of weft are required. The great achievement of Arkwright's water-frame was that by the twist it gave to the thread it made it hard enough for warp, and warp was accordingly known as 'twist', or hard yarn. The jenny could spin only weft, but it could produce much higher counts of weft than the water-frame could of warp. The price of any count of warp was higher than that of the same count of weft, and as the count became higher the difference in price became greater.
In giving an account of his early life to Mr. Bannatyne, Crompton stated that 'soon after the invention of his machine he spun a small quantity of no. 80 to show that it was not impossible … and that for the spinning and preparation of this he got 42s. a lb.' Now in Oldknow's stock-taking of 1783 there is mention of 6 lb. 57 hanks of no. 84 twist valued at 44s. per lb., and of 21 lb. 11 oz. of no. 94 twist valued at 50s. per lb., whilst the highest count of weft mentioned is no. 80 valued at 22s. As the records have not revealed at this early period any other cases of twist so fine as eighties and nineties, it seems not improbable that the small quantities in Oldknow's stock had been spun by Crompton himself. They were almost certainly spun on the mule, but they can only have been used for experimental purposes. In his calicoes, shirtings, and sheetings Oldknow did not use, in 1784, any higher counts than no. 44 in twist and no. 47 in weft; and even for muslins he did not at first get beyond no. 66 in twist and no. 86 in weft. We have what is apparently a complete ​account of the twist delivered at Anderton in November 1784. Out of a total of 1,620 lb. only 20 lb. was in counts over 60 (the highest being 66), and three-quarters of it was in counts of 28 and under. There can be no doubt that the greater part of this was produced on Arkwright's machine. Fine counts of weft as high as 70 were being supplied to Oldknow in 1783 by spinners of Bolton and Ashton and by merchants in Manchester who combined dealings in cotton and yarn.
One of the advantages of Oldknow's establishment at Stockport was that it enabled him to deal directly with a large number of small spinners. The accounts of some fifty of these in the tattered fragments of a ledger of 1786–7 reveal a considerable variety of types, from the woman who earned a pound a fortnight by spinning low counts on a jenny to the owner of a small factory of mules or jennies who supplied fifty pounds' worth of weft in a month. Perhaps the broadest distinction is between those who were paid in cash, fortnightly or oftener, and those who were paid usually by bill every month or two months. All the former class and most of the latter received, and were held accountable for, the cotton, but did not purchase it. Only in a few exceptional cases was the cotton sold to and the yarn bought from the spinner, and in one of these interest was charged, showing that the sale of cotton had been on credit. More than a dozen clearly specialized in high counts from 70 upwards to 92, and these lived chiefly in the Mellor district and at Ashton, Hyde, and Stalybridge.
But it was weft that all these small spinners were engaged in producing, and whilst still finer counts of weft were required for the improvement of his muslins, the chief technical problem that confronted Oldknow was to get finer twist of regular quality in large quantities and at lower prices. This problem was solved by the application of power to the mule, which by the end of 1791 was producing in Oldknow's own factory at Stockport no. 120 weft at 22s. per lb. and no. 120 twist at 23s. At that date, however, Oldknow's career as muslin manufacturer was drawing to a close; it was in the previous five years that he acquired his reputation and his fortune, and the beginnings of fine spinning during this period have hitherto been obscure. William Kelly, the manager of the New Lanark Mills, claimed to have been the first to apply water-power to the mule in 1790, and the establishment of Drinkwater's factory in Manchester, of which Robert Owen was the manager, belongs to the same year. But the mule was in general use before power was applied to it, and William Radcliffe tells us that 'the mule-twist came into vogue for warp as well as weft' in the year 1788, and that this ​led to an immense expansion of weaving in the Stockport district. Our new records, whilst confirming this statement in the main, enable us to trace the beginnings of the new development.
As Arkwright's patent for roller-spinning might claim to cover the similar element in the mule it is probable that the latter was not freely used till the final rejection of Arkwright's claims in the summer of 1785. In April 1786 Salte writes to Oldknow, 'We hear Arkwright has lowered his twist', and again on 10 May, 'Arkwright must lower his twist and he must spin finer. Tell him the reputation of our country against Scotland is at stake. … Great Revolutions we think will happen in Lancashire amongst the Manufacturers of Cotton Yarn.' The clue to the significance of these hints is given in another of our records. The ledger containing the accounts of the small spinners covers the period between the middle of 1786 and the middle of 1788. In 1786 the prices show that nothing is being produced but weft. At the end of February 1787 some of the yarn is distinguished as 'hard' or 'twist', and for this higher prices are paid. The counts of twist thus supplied are mainly those between no. 40 and no. 60, which were amongst the highest hitherto produced by the water-frame. It is clear that the reduction actually recorded in Arkwright's prices in June 1786 was due to the competition of the mules in the hands of small spinners, and that the changes whose fuller operation is ascribed by Radcliffe to the year 1788 had their beginnings in the summer of 1786.
At that time the negotiations for the commercial treaty with France were in progress, and textiles occupied the centre of the discussion, the French being as anxious to find a better market for their cambrics and silks as the English manufacturers were to export more woollen and cotton goods to France. Oldknow's energetic and exuberant London agent did not fail to seize the opportunity. 'S. Salte', he writes on 15 March 1786,
   has had a long interview with the Lords of Trade. They hardly knew of a Manufacture of British Muslins—I took with me various Samples. I need not tell you the Complts that were paid. I was under Examination upon this Subject full two hours. … Mr. Eden was present the whole of the time. I have copied for your perusal … a sort of memorial I presented.
   that the rise of the Cotton Trade hath caused the decline of the Silk Manufacture in this country and if the French adopt the Cotton Trade (as no doubt they will) it will operate with equal power against the manufacture of France.
Salte's peroration has an unconscious irony that would have delighted Adam Smith.
   If your Lordships consider this Object in a Limited and local view only as giving Bread to a part of the Laborious poor of our own country—it rises very high—but if your Lordships consider it in its remote and future consequences as enriching the Manufacturer and Merchant and yielding an ample Revenue to the State—it rises infinitely in dignity and Importance.
But whilst an increasing supply of fine and finer yarns at continually lessening prices enabled the British muslin manufacture to dispose effectually within a few years of the competition of India, it soon compelled Oldknow to face a lively competition at home. Within a fortnight after his prophecy about the revolution in cotton yarn, Salte writes to Oldknow (23 May 1786):
   Our ears are stressed every day with the Excellence of Scotch and Lancashire Muslins; if cheapness proves any excellence they have it indeed. … The Scotch impudence and perseverance is beyond all, but there is a Manufacturer in Lancashire makes excellent goods … a friend of ours last Saturday bought 300, all that came … he says superior to yours and much lower.
And again on 5 June :
   The Lancashire People are all exerting themselves and no less than three or four houses opened to sell Lancashire Muslins by Commission and the accounts of buyers are much in their praise. …
And on 12 July: 'The Scotch have loaded the Town … with Ballasore handkerchiefs.'
After this the refrain of all Salte's letters is the need for pressing on to the goal of technical perfection. Oldknow must outstrip all his rivals by neatness of work and elegance of pattern. He must drop calicoes and cheap muslins and concentrate his energies on his best products. Patterns are sent to Stockport 'of Muslins come over as presents to the People of Fashion … written under to describe to you how they are worked'. If we possessed Oldknow's replies to these letters we might perhaps find him saying that the supply of the finer workmen as of the finer twist was limited, that he could not secure their services unless he found work for calico-weavers in their families, and that if he produced nothing but articles of the highest fashion his capital and his labour would be without employment in the dead season. It was no doubt with a view to the more intimate ​discussion of such problems that Salte made a visit in September 1786 to Oldknow's new country residence at Heaton [Mersey]. On his return south he was accompanied by Oldknow as far as Cromford, and shared in a conference with Richard Arkwright and William Strutt. Salte had evidently gathered that some new arrangement was pending between the Arkwrights and Oldknow. 'I suppose he would keep you longer,' he writes from London on 18 September,
   … and I believe he wishes to show you every kind of Civility. … Young Mr. Strutt told me in going to Derby, no other person could accomplish fine Spinning and such as you want; the old Gentleman was sanguine or apparently so that he would accomplish it—indeed my good Friend something must be done to perfect this yet infant business. We find ourselves pressed very hard from every Quarter. We want a Glaze or Dress upon the goods not yet accomplished. … There is a new invented Cylinder made of paper that does wonderfull well and gives muslins the India Gloss. Think and Think again on this matter.
Oldknow had now reached a further stage in his progress towards the factory system. The spinners and weavers—by this time upwards of eight hundred at Stockport and Anderton for whom he now found employment—worked either in their homes or in small workshops, but the preparatory and finishing processes carried on in his warehouses under the superintendence of foremen were assuming factory dimensions. More than a score of warping-mills were at work in his warehouse at Stockport, and the record of the daily output of half of them for the years 1787–94 affords the best continuous clue we possess to the character of his business. In another workshop fifty girls were engaged in finishing muslins upon twenty-five frames and trimming the patterns with scissors. But so far no use of water- or steam-power is recorded. The decisive step in this respect was taken when a water-wheel was erected for the new bleaching ground and print-works at Heaton, and a mill-race constructed to provide power towards the end of 1786. Oldknow had consulted William Strutt on this project at Cromford, and invited him in November to see the working of the experiment. 'I do think', he adds, 'you should have a bleach-field of your own.'
The new venture was under the management of Thomas Oldknow as partner of his brother. One part of the advice offered by Arkwright in 1784 was now fully adopted, and the other suggestion—that Oldknow should start a spinning-mill—had obviously been again under consideration at Cromford in September 1786, when partnership for this purpose with Richard Arkwright, junior, must have been mooted. On Sunday morning, 15 October, Oldknow rode over before breakfast to meet the younger Arkwright and Simpson, the manager of the elder ​Arkwright's Manchester mill, at Chapel-en-le-Frith for a day's consultation. He had previously written to Salte foreshadowing the negotiations and asking his advice. Salte replies (23 October) cautiously, referring to some recent proposals of the Peels to Oldknow, which had been rightly rejected, as 'selfish in the extreme'. Arkwright's proposals are less questionable, and 'his character determines much in his favour'. But are there not already too many cotton mills? What would it cost to build and equip one? Would it not be better for Arkwright and Oldknow to exchange shares in their respective concerns? It would not be easy to borrow £5,000. Lenders expect land security and 5 per cent. He would like more details, but at present his opinion is unfavourable. Oldknow's account of the negotiations seems to have been reassuring. We may infer perhaps that the mill scheme was dropped and that Arkwright's support was to take another form. Salte, writing on 31 October, thinks advice is superfluous as the matter is practically settled. He hopes soon to congratulate both 'on an event that will have the best tendency to improve the Muslin Manufacture of this Country'.
In a letter bearing the same date Arkwright presses Oldknow to come to Bakewell soon, but adds 'you can perhaps put an end to it by letter … and then say if you please whether 1 or 2 for 6 or 12 months certain will be of use and it is at your service'. On 18 November Salte is still wanting particulars, but takes it that Mr. Arkwright has offered to bring £15,000 into the muslin business. On the 21st he has received particulars and cannot foresee any cause for repentance. But on the 23rd, hearing that Oldknow has changed his mind, he admits that he has entertained doubts himself. A man should never share the control of his business unless driven by necessity. 'Why give the advantage of a Harvest to another which your Labour and Skill hath been employed in raising? Your request is granted with respect to drawing upon us. We feel a pleasure in supporting a worthy Man and wish to lead him to the Temple of Fortune.' On 1 December he still thinks that in declining the late connexion Oldknow will be much happier, but he 'apprehends Mr. A. to be what he has proved,—a Gentleman and I think he will assist you at any time in the pecuniary way but pray above all do not involve yourself in too many schemes'.
Of the arrangement undoubtedly made about this time between Oldknow and the Arkwrights no precise and explicit account has been found in the records, but there are sufficient data to establish its general character. Throughout 1787 the elder Arkwright was supplying Oldknow with a large amount of capital in the form of yarn on credit and periodical drafts, so that at the beginning of 1788 there was a debt of £10,256 on which ​interest at 5 per cent. was being paid. At the time of Sir Richard's death in 1792 the debt was £12,000, and remained at this amount in 1796. Oldknow's inability to pay the interest on this loan seems to have been one of the main causes of the disposal of his Stockport properties and of the concentration of his business in the spinning-mill at Mellor; but for a considerable amount of the capital invested there Oldknow must have remained indebted to the younger Arkwright, into the hands of whose successors the mill ultimately passed. These facts sufficiently account for the coupling together of Oldknow and Arkwright as partners in the business world and even in bankers' documents, but that either of the Arkwrights exercised any internal control in the management of Oldknow's business, either as a muslin manufacturer or as a spinner, seems to be disproved by all the evidence at our disposal.
The part played by the Arkwrights in effecting the transformation of Oldknow into a factory-master is sufficiently clear. It is now time to notice other factors in this development, and especially the influence of Oldknow's commercial environment. Between the conference at Cromford in September 1786 and the building of Oldknow's spinning mills at Stockport and Mellor four years were to elapse, two lean years followed by two years of prosperity. It was the large profits of the two latter years that supplied the means and seemed to furnish the justification for the magnificent schemes described in Owen's autobiography, but the pressure of competition in the lean years had already convinced Oldknow of the need for an increase of efficiency attainable only in the factory system. Conclusive evidence on this important point is found in the letters of Oldknow during the commercial crisis of 1787, which, as they were written from London to his brother at Stockport, have fortunately been preserved. A few words on the general situation will serve to explain their purport.
The high hopes awakened by the French treaty of 1786 perhaps tended to defeat themselves by inducing speculation. As early as 21 November 1786 Salte wrote to Oldknow, 'A Bubble of an enormous magnitude seems collecting here. It will burst with a great Fury and do much mischief in three or four months.' And again on 15 December, 'The late speculations have done infinite harm to every article made of cotton wool. … This will be like the Shock of an Earthquake to many Persons. … Keep snug and quiet.' Nevertheless the sales of Oldknow as evidenced by his day-book do not show much diminution till the autumn of 1787, when the arrival of the East Indian fleet with unusually large cargoes of muslins, calicoes, and nankeens entirely stopped for a time the demand for some of his chief products. A much​quoted pamphlet of 1788 states that, whilst the average sales of Indian muslins for the years 1780–6 had been 185,964 pieces, they rose in 1787 to 304,762, and that prices fell 30 to 50 per cent. The writer is making out a case in the interests of British manufacturers for the exclusion of all piece-goods from India, which ought on mercantilist principles to supply Great Britain only with raw materials, and his statistics need handling with caution; but there seems no doubt that the supply of Indian textiles, which had dwindled during the wars of the previous period, had recovered under the peaceful regime of Cornwallis.
'I have been with Mr. Salte at the India House,' writes Samuel Oldknow on 18 October to his brother;
   the Private Trade Sale comes on tomorrow and the Company has declared for a very large Sale the 25th of next month—no less than Six Ships Cargo—and another Private Trade Sale will be in Feby next, so that there are more India Goods coming into the Market than has been known of these many years in so short a time. We must drop making some articles.
And on the next day, after attending the sale, he sends a list of the articles to be dropped for the present, and adds:
   I was in hopes to have discovered an opening for the increse of our weavers, but it will be wise to reverse it—in every sort of goods that we have 60 pieces we will not make any more of till that number be reduced to about 10. … Very fine thin goods sold high—so that very fine thin goods we must make our aim. Mr. A. sent us some 85 this week and we shall have some still finer the next. … Tell Wm. he need not do anything towards fixing another yarn-beam till I come home for I shall show him how—I am desirous of making such things as no body else is making and to have them done in our own Shop—so that do push forward the Looms and the finishing Waterside house.
These forecasts as to the effects of Indian competition in the immediate future are fully justified by the sales recorded in Oldknow's day-books. For May, June, and July 1787 the total had been £15,959, and during the same three months of 1788 they sank to £11,972. But in 1789, in spite of the fact that at the March sale of this year there were some 70,000 pieces of Indian muslin left over from the sale of the previous September, to be seen at the Bengal Warehouse, East India House, Oldknow's total sales for May, June, and July rose to the unprecedented amount of £27,054; and as the total for the seven months recorded is £54,912, that for the year cannot well have been less than £80,000, so that this was almost certainly one of the two successive years referred to by Robert Owen when Oldknow's ​profits were said to have reached £17,000; and the other year is probably 1790, as the sales recorded for January amount to £6,010 as compared with £4,453 in January 1787.
It was in these two prosperous years that Oldknow's long-meditated plans for the adoption of the factory system took actual shape, though the work was not completed for two years more. In the spring of 1789 the records show him to be employing some forty spinners, mainly children, in a factory at The Carrs in Stockport, about ten minutes' walk from his Hillgate premises. This was probably a transformed silk-mill rented for the purpose, and the machines water-frames. There is a record of the cotton delivered there in 1789–91, of the rovings and low counts of yarn produced in 1790–1, and of the stock-taking of 1 September 1791, and there the story ends. Oldknow perhaps regarded this small venture as an experiment in mill management to be relinquished as soon as his own factories were at work. His plan was to carry on winding and fine spinning by steam at Stockport, and to spin low and medium counts by water-power at Mellor. The Stockport factory was the first to be completed. A Boulton and Watt engine was installed during the winter of 1790–1, and there is a record of the operation of ten machines, each winding 2,000 to 4,000 hanks per week from April 1791. There is a Stockport tradition that the London stage coaches stopped as they passed Oldknow's factory so that the passengers might see at work the first steam engine to be erected in the town. By December 1791 fine counts of weft as high as no. 140, and of twist as high as no. 120, were being spun in a new five-storied mill for use in the muslin manufacture.
But it is the larger mill at Mellor with which we are mainly concerned. The estate at Bottoms, where Oldknow later on built his Apprentice House, was in his possession in the autumn of 1787, when neighbouring farmers were ploughing the land for him. Larger bills for labour in 1789 show that preliminary operations for the provision of water-power were in progress. The inscription 1790 underneath the initials S.O., and the representation of a weaver's shuttle on a large oval stone tablet which lies on the greensward near the ruins of the mill, would seem to commemorate the laying of the foundations, as the earliest building recorded is in May 1791, and the work was still incomplete at the end of 1792. Upwards of a score of weekly or fortnightly accounts of 'Wages paid at Mellor' supplemented by long and detailed bills of master-painters, plasterers, machinists, saddlers, &c., covering long periods provide materials for reconstructing the progress of the undertaking. Sixty men were employed for several days at the end ​of March 1791 in planting trees, and the catching of moles was another preliminary job. During the first year the workers engaged are practically all men and boys; masons, carpenters, sawyers, navvies, agricultural and general labourers, and colliers. In the second year these are partly displaced by smiths and filers erecting the carding and spinning machines, and by women and children who are gradually set to work upon them, as well as others kept busy picking cotton in their homes.
At this point light is offered by the narrative of Robert Owen, which has already been cited. Owen, who had become the manager at the age of twenty of the first large factory erected for fine spinning in Manchester, had achieved such a remarkable success that his employer, Mr. Drinkwater, a wealthy Manchester merchant with no knowledge of spinning, made him a spontaneous offer of partnership. A little later, to the great mortification of Owen, the offer was withdrawn at the suggestion of Oldknow, who had become a suitor for the hand of Miss Drinkwater in the hope of surmounting a threatened crisis in his fortunes with the help of her father.
   When the trying time of 1792 arrived, he was too wide in his plans to sustain their expenditure without making great sacrifices. To prevent this it was afterwards generally thought that he considered a union with Miss Drinkwater would by the assistance of her father enable him to proceed unchecked. He was a hearty, healthy, handsome man but yet perhaps five years older than Miss Drinkwater's present suitor. Mr. Drinkwater was flattered by his application, for at this time Mr. Oldknow stood prominent in the cotton world, next to the Arkwrights and Strutts of Derbyshire. … For some time all matters seemed to proceed successfully with Mr. Oldknow, and for a certain period he had great influence over Mr. Drinkwater. … He expressed a desire that the whole business of both houses should be kept entirely to themselves and my partnership … stood in the way of this exclusive dealing with Mr. Drinkwater's property.
Though asked to name his own terms for the relinquishment of the partnership, Owen was so much hurt that he thrust the agreement with Drinkwater into the fire, and left him as soon as he could find another manager for him. Writing of the New Lanark period some five years later Owen tells us that 'Mr. Drinkwater had discovered that Mr. Oldknow's pecuniary position was not what he had anticipated and therefore the match … did not take place'.
The new records supplement this account by brief but vivid glimpses of Oldknow's embarrassments. Early in 1791 he is found negotiating with a retired cotton merchant, Mr. Henry Norris of Davy Hulme Hall, for a loan of £2,000 to cover the purchase of land. Norris stipulates for 'double bonds', ​Oldknow replies that he will not ask any person to be joined security with him. Norris insists on the right to lay down rules for the conduct of his private affairs, and adds, 'It is fortunate the circumstance happens to a person whose credit is above conjecture'. In December 1791 Norris asks if he is to expect 'the payment of the £2,000, or the land security you noted to me in your last letter'. In the meantime Oldknow had been falling behind in his remittances to Arkwright, who writes on 13 September 1791, 'It is true I did not expect a regular sum to be remitted me every week but I understood the defalcation of one week should be made up in another which you have not done'. Before midsummer 1792 Oldknow had apparently been driven to seek the financial assistance of Drinkwater, and Arkwright, in acknowledging the receipt of half a year's interest on the debt of £12,000, adds, 'I hope the person, whoever he is, that you have joined, has £20,000 to spare, and will turn out an agreeable partner'. The new connexion had evidently been formed with the intention of paying off Arkwright, but the commercial crisis of 1792, followed by the outbreak of war in 1793, compelled Oldknow not only to contract fresh loans with his bankers, Smith, Payne & Smith, but also, on the death of his brother in the autumn of 1793, to sell the bleach- and print-works at Heaton Mersey. In May 1794, when the bankers were pressing for the repayment of their loan, Oldknow wrote to Arkwright, asking that he might defer payment on the long-standing debt to him. To this, not unnaturally, Arkwright replied with some heat,
   … you know what was my opinion from the first of your launching out into these extremes, and you have pretended to consult Mr. Strutt and myself what was best to be done, but instead of following our advice you have continued to increase your machinery. … Will Mr. D. join you in to me for the debt and engage … the interest shall be regularly paid? One may talk of letting matters rest till 6 or 12 months after the war, but surely such a thing is quite unmercantile.
It will be seen that a remarkable interest attaches to the shop-notes issued in payment of wages at the Mellor mill in 1793–4 from several different points of view. They are symptomatic of an important crisis in the private fortunes of Samuel Oldknow and constitute an episode in the history of the Truck System. But they have a still wider significance in relation to the history of commercial credit and of paper currency. Enough has been said to show the almost desperate condition of Oldknow's affairs at the beginning of 1793. He had invested an immense capital for those days—probably £20,000 at least—in the fixed forms of land, buildings and machinery, which would not yield any return without the assistance of commercial credit, and owing to ​the outbreak of war commercial credit had almost ceased for the time to exist. No fewer than 872 bankruptcies were recorded between November 1792 and July 1793. The problem of credit currency became acute. The country banks, which had multiplied greatly during the previous decade, had produced an over-issue of notes, some of them for such small amounts as to provoke the derisive issue by a Newcastle cobbler of a note for twopence. But the notes even of the sounder banks were now returned on their hands and many were obliged to close their doors. In the chief business centres various plans were adopted for keeping a credit currency afloat, and so preventing a complete collapse of commerce and industry. Liverpool, with the sanction of parliament, issued municipal notes to the amount of £200,000. A meeting at Manchester resolved that during the emergency it could not be considered disreputable for houses to make payments in their own notes payable in three months with interest. A committee of business men at Newcastle, after examining the books of the leading bankers, assured the public that their circulation was moderate and their security almost without limit, and a guarantee fund of £320,200 was subscribed by 148 local business men. The first of Oldknow's notes that have survived were issued on 13 April 1793, within a few days of the Manchester meeting and of the Newcastle guarantee.
The form taken by the shop-notes was to some extent determined by conditions independent of the commercial crisis. Like other captains of industry who built factories in rural districts, Oldknow had been obliged to organize supplies of the chief necessaries of life for many of his workers. Since the beginning of 1791 he had been providing houses, milk, coals, meat, and even beds for an increasing number of transient or permanent employés, and deducting the cost from their wages. There is no reason to stigmatize this as 'truck'. Most if not all of the necessaries supplied were produced on Oldknow's own estate, and were probably sold more cheaply than they could otherwise have been obtained. Even when he advanced £50 to two brothers in August 1791, for the purpose of stocking a general shop, it is likely that it was the convenience of the new population and not his own profit that he had chiefly in mind. Enlightened self-interest mingled with higher motives led employers like Robert Owen and the Gregs of Styal to organize supplies without exploiting their workers, and the systems they created passed into the hands of co-operative societies. ​But however disinterested Oldknow's original scheme of supply may have been, the crisis gave quite a different turn to it. The method of payment in kind was now applied to the whole of the wages of his employés instead of to a mere fraction of them. In effect it was an appeal to the community at Mellor and Marple, in whose midst he had set up his new enterprise and who might be presumed to have a deep interest in its success, to provide the credit which alone could save it from collapse. In form the shop-notes were cheques drawn on his own shop for payment in kind at sight. Most of those who received them would, however, not care to spend all their wages in Oldknow's shop, but would try to get cash or other goods elsewhere for the balance. In this case the notes became promissory notes of uncertain date, which the workers who received them, or the shopkeepers who honoured or discounted them, must hold till Oldknow was able to provide cash or an equivalent. Sometimes the holder of a bundle of the notes received at once a two months' bill drawn on one of Oldknow's London customers; sometimes he got cash after waiting two months. In this curious way a score of the villagers became involuntary and amateur bankers in support of Oldknow's enterprise, though the bulk of the business was under-taken by four or five, presumably tradesmen. The leading banker in the village was John Downes, who kept Oldknow's shop and acted in his private capacity as money-lender to the workpeople.
What evidence is there, it may be asked, as to the extent to which Oldknow made use of these credit notes and of the relief which they afforded to his financial troubles? Fortunately the documents that have survived afford some answer to these questions. Whilst building operations were in full progress, during 1791 and 1792, the fortnightly totals of wages and other expenses had averaged between £250 and £300. On 31 March 1792 they were £340, on 1 September 1792 £285; but by the latter date a portion of the mill was at work and about £70 of the £285 consisted of wages paid to factory workers and cotton pickers. On 27 April 1793, when the structure must have been practically completed, though the plumbers and glaziers were still at work and the millwrights were erecting machinery, the fortnightly wages bill came to £184, of which two-thirds were due to mill hands and the remaining £60 to colliers and other outside workers. From these wages £38 12s. 8d. was deducted for rents and other goods already received by the workers, and £129 16s. 9½d. was paid in shop-notes, leaving only about £16 which was paid in some other form. More than nine-tenths of the wages therefore were paid, in the first instance, in kind. But in order to meet the case of those who demanded cash, the further sum of £27 2s. 0d. ​was doled out in small instalments which were entered on the back of the shop-notes.
By this time, however, Oldknow, besides accumulating heavy debts of a larger kind, had got into arrears with the small contractors of the neighbourhood, and now that his note system was at work, the time seemed opportune for meeting their demands. On 25 May 1793 the account for wages, &c., at Mellor rose to £341 10s. 5d., of which only about £120 was due to mill hands; deductions for rents and other supplies received amounted to £52; 'notes upon shop' to £233; and a bill of exchange for £30 was paid to one of the contractors, leaving about £26 to be accounted for by cash or other modes of payment. In addition to this, however, the holders of shop-notes received small sums in cash amounting to £16 10s. 11½d. It will be seen that Samuel Oldknow contrived during the crisis of 1793 to carry on his factory by cash payments to his workers amounting to no more than two shillings in the pound.
Letters from Arkwright in April 1795 and July 1796 show him acknowledging instalments of interest, and urging repayment of 'this vast debt'; and indicate that Oldknow had borrowed an additional £5,000 from his bankers. By this time Oldknow had given up his manufacture of muslins, had let his Stockport works, and had taken up his residence at Mellor, where—as the employer of three hundred mill hands, as a master responsible for the board, lodging, clothing, and upbringing of fifty to a hundred apprentices, as an improving landowner and colliery proprietor, as canal director and road-maker—he was becoming the founder of a new industrial community. But it was not till 1798 that he offered for sale his Stockport works and other estates which he had acquired for industrial purposes, and the letter from Arkwright on 2 February 1798, which probably led to this step, may perhaps be an indication that until then Oldknow had not abandoned hope of reviving the wider plans of 1792:
   No favourable circumstances have arisen in business to induce me to alter the sentiments I expressed when I last wrote to you, indeed everything seems to conspire to extinguish the little prospect there then was of my taking up the idea you have been suggesting. It would be downright madness in me to engage myself—I dread the consequences that seem likely to follow the present situation of trade. Many mills are giving over. In this neighbourhood Mr. Strutt's have shortened their time of working, and so has Mr. Nightingale—I have been so much undercut that I have made little sales for this long time. Nobody adhere to their lists and what steps to take I do not know … I am sorry it is not convenient to you to remit me the interest. … It seems to me trade cannot mend till there is a peace, or till one-half, two-thirds or perhaps three-fourths of the mills have given over working.
   Rent of Mellor Mill 1,600 (£) a year
| | £ | s. | d. |
| Rent of a week is 2d. a pound on 3,700 lb. | 30 | 16 | 8 |
| Rent or interest of machinery is, at 10 per cent. on £16,000, the same as the rent, and on 3,700 lb. is 2d. a pound | 30 | 16 | 8 |
| Management, Clerks, Smiths, Joiners, &c., Insurance, Carriage, Postage taken at 2d. a lb. on 3.700 spun per week | 30 | 16 | 8 |
| Per week or 6d. a lb. on 3,700 | 92 | 10 | 0 |
| Wages per week: | | | |
| 318 mill hands | 74 | 0 | 0 |
| 100 apprentices | 20 | 0 | 0 |
| | 94 | 0 | 0 |
   That 12d. a lb. on 3,700 is the real cost of Spinning and £1 10s. 0d. over.
George Unwin.
* ↑ I wish to add a name which was accidentally omitted from the acknowledgement, on p. 207 above, of help received in the preparation of this and the former article on this subject, that of Mr. J. Smith of Marple.
* ↑ Baines, History of Cotton Manufacture, p. 200.
* ↑ Baines, History of Cotton Manufacture, p. 205.
* ↑ Owen, Life, i. 6.
* ↑ Journal and Correspondence of Lord Auckland, i. 129, 493, 499; see also J. H. Rose, ante, xxiii. 714, and Dr. Witt Bowden in American Hist. Rev. xxv. 18.
* ↑ An Important Crisis in the Calico and Muslin Manufacture in Great Britain Explained, 1788.
* ↑ Printed catalogue of Bengal Goods for sale at the East India House March Sale, 1789, found in the factory.
* ↑ Heginbotham, History of Stockport, ii. 323.
* ↑ Owen, i. 40–1, 59.
* ↑ M. Phillips, A History of Banks, Bankers and Banking, pp. 43–60.
* ↑ G. W. Daniels, The Cotton Trade during the Revolutionary and Napoleonic Wars.
* ↑ Phillips, pp. 48–52.
* ↑ Owen, i. 63.