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On the Cotton Crisis

Source: MECWVolume 19, p. 160;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 Manchestertookplace. It represents Lancashire, the greatest industrial district of the United Kingdomand 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, representManchester and a part of Lancashire in the Lower House. From the proceedings of themeeting, therefore, we learn officiallywhat attitude the great centre of the English cottonindustry will adopt in the Senate of the nation in face of the American crisis.

At the meeting of the Chamber of Commerce last yearMr. Ashworth, one of Englandsbiggest cotton barons, had celebrated with Pindaric extravagance the unexampledexpansion of the cotton industry during the last decade. In particular he stressed thateven the commercial crises of 1847 and 1857 had produced no failing off in the exportof English cotton yarns and textile fabrics. He explained the phenomenon by thewonder-working powers of the free trade system introduced in 1846. Even then itsounded strange that this system, though unable to spare England the crises of 1847and 1857, should be able to withdraw aparticularbranch of English industry thecotton industry from the influence of those crises. But what do we hear to-day? Allthe speakers, Mr. Ashworth included, confess that since 1858 an unprecedentedglutting of the Asian markets has taken place and that in consequence of steadilycontinuing 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 years exports would have beenas much as 6,000,000, naturally remains an open question, but does not appearimprobable when we hear that the principal markets of Asia and Australia are stockedwith English cotton manufactures for twelve months.Thus, according to the admission of the Manchester Chamber of Commerce, which inthis matter speaks with authority, the crisis in the English cotton industry has so farbeen the result not of the American blockade, but of English overproduction. But whatwould be the consequences of a continuation of the American Civil War? To thisquestion we again receive an unanimous answer: Measureless suffering for the workingclass 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 ofprice, and at present pricesthe capital of the millowners is being destroyed,The Chamber of Commerce, however, declares itself to be decidedly against anyintervention in the United States, although most of its members are sufficiently swayedby 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 lastplace whence such a proposal could issue is Manchester. Nothing will tempt us tosuggest anything that is morally wrong.

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Mr. Bazley:Our attitude to the American quarrel must be one of strict non-intervention. The peopleof that vast country must be allowed to settle their own affairs.Mr. Cheetham: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 theother side upon the Government if there was any doubt of it.What, then, does the Chamber of Commerce recommend? The English governmentought to remove all the obstacles of an administrative character that still impede cottoncultivation in India. In particular, it ought to lift the import duty of 10 per cent with whichEnglish cotton yarns and textile fabrics are burdened in India. The rgime of the EastIndia Company had hardly been done away with, East India had hardly beenincorporated in the British Empire, when Palmerston introduced this import duty onEnglish manufactures through Mr. Wilson, and that at the same time as he sold Savoyand Nice for the Anglo-French commercial treaty. Whilst the French market was openedto 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 dutygreat quantities of English machinery had been exported to Bombay and Calcutta andfactories had been erected there in the English style. These were preparing to snatchthe best Indian cotton from them. If 15 per cent for freight are added to the 10 per centimport duty, the rivals artificially called into being through the initiative of the Englishgovernment enjoy a protective duty of 25 per cent.In general, bitter resentment was expressed at the meeting of magnates of Englishindustry at the protectionist tendency that was developing more and more in thecolonies, in Australia in particular. The gentlemen forget that for a century and a half thecolonies protested in vain against the colonial system of the mother country. At that

time the colonies demanded free trade. England insisted on prohibition. Now Englandpreaches free trade, and the colonies find protection against England better suited totheir interests.