On the Cotton Crisis (February 1862)
Written: in early February 1862;
First published: in Die Presse, February 8, 1862.
Some days ago the annual meeting of the Chamber of Commerce of Manchester took place. It represents Lancashire, the greatest industrial district of the United Kingdom and the chief seat of British cotton manufacture. The chairman of the meeting, Mr. E. Potter, and the principal speakers at it, Messrs. Bazley and Turner, represent Manchester and a part of Lancashire in the Lower House. From the proceedings of the meeting, therefore, we learn officially what attitude the great centre of the English cotton industry will adopt in the “Senate of the nation” in face of the American crisis.
At the meeting of the Chamber of Commerce last year Mr. Ashworth, one of England’s biggest cotton barons, had celebrated with Pindaric extravagance the unexampled expansion of the cotton industry during the last decade. In particular he stressed that even the commercial crises of 1847 and 1857 had produced no failing off in the export of English cotton yarns and textile fabrics. He explained the phenomenon by the wonder-working powers of the free trade system introduced in 1846. Even then it sounded strange that this system, though unable to spare England the crises of 1847 and 1857, should be able to withdraw a particular branch of English industry — the cotton industry — from the influence of those crises. But what do we hear to-day? All the speakers, Mr. Ashworth included, confess that since 1858 an unprecedented glutting of the Asian markets has taken place and that in consequence of steadily continuing overproduction on a mass scale the present stagnation was bound to occur, even without the American Civil War, the Morrill tariff and the blockade. Whether without these aggravating circumstances the falling off in last year’s exports would have been as much as £6,000,000, naturally remains an open question, but does not appear improbable when we hear that the principal markets of Asia and Australia are stocked with English cotton manufactures for twelve months.
Thus, according to the admission of the Manchester Chamber of Commerce, which in this matter speaks with authority, the crisis in the English cotton industry has so far been the result not of the American blockade, but of English overproduction. But what would be the consequences of a continuation of the American Civil War? To this question we again receive an unanimous answer: Measureless suffering for the working class and ruin for the smaller manufacturers.
“It is said in London,” observed Mr. Cheetham, “that we have still plenty of cotton to go on with; but it is not a question of cotton, but a question of price, and at present prices the capital of the millowners is being destroyed,”
The Chamber of Commerce, however, declares itself to be decidedly against any intervention in the United States, although most of its members are sufficiently swayed by The Times to consider the dissolution of the Union to be unavoidable.
“The last thing,” says Mr. Potter, “that we could recommend is intervention. The last place whence such a proposal could issue is Manchester. Nothing will tempt us to suggest anything that is morally wrong.”
“Our attitude to the American quarrel must be one of strict non-intervention. The people of that vast country must be allowed to settle their own affairs.”
“The leading opinion in this district is wholly opposed to any intervention in the American dispute. It is necessary to make this clear, because strong pressure would be put by the other side upon the Government if there was any doubt of it.”
What, then, does the Chamber of Commerce recommend? The English government ought to remove all the obstacles of an administrative character that still impede cotton cultivation in India. In particular, it ought to lift the import duty of 10 per cent with which English cotton yarns and textile fabrics are burdened in India. The régime of the East India Company had hardly been done away with, East India had hardly been incorporated in the British Empire, when Palmerston introduced this import duty on English manufactures through Mr. Wilson, and that at the same time as he sold Savoy and Nice for the Anglo-French commercial treaty. Whilst the French market was opened to English industry to a certain extent, the East Indian market was closed to it to a greater extent.
With reference to the above, Mr. Bazley remarked that since the introduction of this duty great quantities of English machinery had been exported to Bombay and Calcutta and factories had been erected there in the English style. These were preparing to snatch the best Indian cotton from them. If 15 per cent for freight are added to the 10 per cent import duty, the rivals artificially called into being through the initiative of the English government enjoy a protective duty of 25 per cent.
In general, bitter resentment was expressed at the meeting of magnates of English industry at the protectionist tendency that was developing more and more in the colonies, in Australia in particular. The gentlemen forget that for a century and a half the colonies protested in vain against the “colonial system” of the mother country. At that time the colonies demanded free trade. England insisted on prohibition. Now England preaches free trade, and the colonies find protection against England better suited to their interests.