Here, as before, we assume there is no change in the rate of surplus-value. This is a necessary assumption, if we are to investigate the situation in its pure form. It would certainly be possible, however, at a constant rate of surplus-value, for a certain capital to employ a greater or lesser number of workers as the result of a contraction or expansion which the fluctuations in raw material prices we are about to consider might bring about. In this case the mass of surplus-value could change, even though the rate was constant. This is however a side-effect, which we shall not consider here. If an improvement in machinery and a change in the price of raw material simultaneously affect the number of the workers employed by a given capital, or else the level of wages, we simply have to combine (1) the effect that the variation in constant capital has on the profit rate, and (2) the effect that the variation in wages has on the profit rate. The result is then immediately given.
Here too, as in the previous case, it should be noted that, like those variations which result from economy in the use of constant capital, variations resulting from fluctuations in the price of raw material also always affect the rate of profit, even if they leave wages, and thus the rate and mass of surplus-value, completely undisturbed. In s’ν/C, they alter the value of C and therefore the value of the fraction as a whole. It is therefore completely immaterial here – as distinct from what we found in considering surplus-value – in what spheres of production these variations take place; whether the branches of industry that they affect produce means of subsistence for the workers or constant capital for the production of these means of subsistence, or whether they do not. The argument developed here is equally valid when these variations occur in luxury production, and by luxury production here we mean all production that is not required by the reproduction of labour-power.
Under raw material we also include the ancillary materials such as indigo, coal, gas, etc. Moreover, in so far as machinery is considered under this heading, it has its own raw material consisting of iron, wood, leather, etc. Its price is therefore also affected by fluctuations in the price of the raw material involved in its construction. In as much as its price is raised by fluctuations in the price of the raw material of which it consists, or of the ancillary material that it needs in the course of its operation, the rate of profit falls in proportion to this, and vice versa.
In the investigations which follow we shall confine ourselves to fluctuations in price of that raw material which actually goes into the process of production of the commodity, and not consider the raw material of machines that function as means of labour or the ancillary materials required in their use. The only point we want to note here is that natural riches in the shape of iron, coal, wood, etc., the main elements in the construction and use of machines, appear now as a natural fruit borne by capital and form an element in the determination of the rate of profit that is independent of the high or low level of wages.
Since the rate of profit is s/C or s/c + ν, it is clear that everything that gives rise to a change in the magnitude of c, and therefore of C, also brings about a change in the profit rate, even if s, v and their reciprocal relationship remain constant. Raw material, however, forms a major component of constant capital. Even in branches of industry that do not use any specific raw material of their own, there is still raw material in the form of ancillary material or the components of the machinery, etc., and so its fluctuations in price still influence the rate of profit accordingly. If the price of raw material falls by a sum we shall call d, then s/C or s/c + ν is changed to s/c − d or s/(c − d) + ν, and the rate of profit falls. As long as other circumstances are equal, the rate of profit falls or rises in the opposite direction to the price of the raw material. This shows among other things how important low raw material prices are for industrial countries, even if variations in raw material prices were not accompanied by fluctuations in the product’s orbit of sale, i.e. quite apart from the relationship between demand and supply. It also explains how foreign trade influences the rate of profit, irrespective of any effect that it has on wages by cheapening the necessary means of subsistence. Foreign trade particularly affects the prices of the raw or ancillary materials used in industry and agriculture. The fact that any understanding of the rate of profit and its specific difference from the rate of surplus-value has been so completely lacking is responsible for a situation in which on the one hand those economists who emphasize the important influence of raw material prices on the rate of profit, as established by practical experience, give this a quite false theoretical explanation (Torrens), while on the other hand those economists who hold firmly to the general principles, such as Ricardo, fail to recognize the influence of such things as world trade on the profit rate.*
We can thus understand how important for industry is the abolition or reduction of import duties on raw materials. To let in raw materials as freely as possible was already a principal doctrine of the system of protection in its more rational presentations. This was, alongside the repeal of the Corn Laws, the main preoccupation of the English Free-Traders, when they took care to abolish the duty on cotton as well.
To give one example of how important low prices are for an ancillary material and not just for raw materials proper, we may take an ancillary material that is also a major foodstuff: flour, which is used in the cotton industry. As long ago as 1837, R. H. Greg13 calculated that the 100,000 power-looms and 250,000 hand-looms that were then used for cotton-weaving in Britain annually consumed some 41 million pounds of flour for smoothing the warp. In addition, a further third of this amount was used in bleaching and other processes, Greg calculates that the total value of the flour consumed in this way was £342,000 per year for the preceding ten years. Comparison with flour prices on the Continent showed that the higher price for flour forced on the factory-owners by the duties on corn amounted to some £170,000 a year alone. For 1837, Greg estimates it as at least £200,000, and speaks of one single firm for which this excess price amounted to £1,000 a year. As a result, ‘great manufacturers, thoughtful, calculating men of business, have said that ten hours’ labour would be quite sufficient, if the Corn Laws were repealed’ (Reports of the Inspectors of Factories… 31 October 1848, p. 98).
The Corn Laws were repealed, and the duties on cotton and other raw materials abolished as well. But scarcely had this been achieved when the factory-owners’ opposition to the Ten Hours Bill became more violent than ever. When despite this the Ten Hours Bill did become law soon afterwards, its first effect was an attempt at a general reduction of wages.*
The value of the raw and ancillary materials goes at a single stroke into the value of the product for which they are used, while the value of the elements of fixed capital goes in only to the extent of their depreciation, and thus only gradually. It follows from this that the price of the product is affected to a much higher degree by the price of raw material than by that of fixed capital, even though the rate of profit is determined by the total value of the capital applied, irrespective of how much of this is consumed or not. It is evident however – even if this is mentioned only in passing, as we are still assuming here that commodities are sold at their values and are not yet concerned with the fluctuations in price that are brought about by competition – that the expansion or contraction of the market depends on the price of the individual commodity and stands in an inverse relationship to the rise or fall in this price. It happens in fact, therefore, that a rise in the price of raw material does not lead the price of the manufactured product to rise in the same proportion, or to fall in the same proportion when the price of the raw material falls. The rate of profit thus falls more sharply in the one case, and rises more sharply in the other, than would be the case if commodities were sold at their values.
Moreover, the size and value of the machines employed grows as the productivity of labour develops, but not in the same proportion as this productivity itself, i.e. the proportion to which these machines supply an increased product. Thus in any branch of industry that uses raw materials, i.e. wherever the object of labour is already the product of earlier labour, the increasing productivity of labour is expressed precisely in the proportion in which a greater quantity of raw material absorbs a certain amount of labour, i.e. in the increasing mass of raw material that is transformed into products, worked up into commodities, in an hour, for example. In proportion therefore as the productivity of labour develops, the value of the raw material forms an ever-growing component of the value of the commodity produced, not only because it enters into it as a whole, but because in each aliquot part of the total product, the part formed by the depreciation of the machines and the part formed by newly added labour both constantly decline. As a result of this falling movement, a relative growth takes place in the other component of value, that formed by the raw material, provided that this growth is not cancelled out by a corresponding decline in the raw material’s value arising from the increasing productivity of the labour applied in its own creation.
Moreover, since the raw and ancillary materials, just like wages, form components of the circulating capital and must therefore be constantly replaced out of each sale of the product, whereas as far as the machine is concerned it is only the depreciation that has to be replaced and at first only in the form of a reserve fund (in this connection it is in no way so essential that each individual sale should contribute its part to this reserve fund, as long as we assume that the year’s sale as a whole provides its annual share), we see here again how a rise in the price of raw material can cut back or inhibit the entire reproduction process, since the price obtained by the commodity’s sale no longer suffices to replace all of its elements; or it makes it impossible to continue the process on a scale that corresponds with its technical basis, so that either only a section of the machinery is being used, or the whole machinery cannot work for the full customary time.
The costs resulting from waste, finally, vary in direct proportion to the fluctuations in the price of the raw material, rising when this rises and falling when it falls. Here too, however, there is a limit. In 1850 it could still be said: ‘One source of considerable loss arising from an advance in the price of the raw material would hardly occur to any one but a practical spinner, viz., that from waste. I am informed that when cotton advances, the cost to the spinner, of the lower qualities especially, is increased in a ratio beyond the advance actually paid, because the waste made in spinning coarse yarns is fully 15 per cent; and this rate, while it causes a loss of 1/2d. per lb. on cotton at 3 1/2d. per lb., brings up the loss to Id. per lb. when cotton advances to 7d.’ (Reports of the Inspectors of Factories… 30 April 1850, p. 17). But when the American Civil War caused cotton to rise to prices almost unheard of in a hundred years, the report sang quite a different tune: ‘The price now given for waste, and its re-introduction in the factory in the shape of cotton waste, go some way to compensate for the difference in the loss by waste, between Surat cotton and American cotton, about 12 1/2 per cent.
‘The waste in working Surat cotton being 25 per cent, the cost of the cotton to the spinner is enhanced one-fourth before he has manufactured it. The loss by waste used not to be of much moment when American cotton was 5d. or 6d. per lb., for it did not exceed 3/4d. per lb., but it is now of great importance when upon every lb. of cotton which costs 2s. there is a loss by waste equal to 6d.’14 (Reports of the Inspectors of Factories… October 1863, p. 106.)
The phenomena under investigation in this chapter assume for their full development the credit system and competition on the world market, the latter being the very basis and living atmosphere of the capitalist mode of production. These concrete forms of capitalist production, however, can be comprehensively depicted only after the general nature of capital is understood; it is therefore outside the scope of this work to present them – they belong to a possible continuation.* Yet the phenomena listed in the title to this section can still be discussed here in broad lines. They are both inter-related and related to the rate and mass of profit. And this reason alone justifies a brief account of them, because they make it appear as if it is not only the rate of profit but also its mass (which is in fact identical with the mass of surplus-value) that can increase and decrease independently of movements of surplus-value, whether of its mass or its rate.
Should the release and tying-up of capital on the one hand, and its rise and fall in value on the other, be treated as separate phenomena?
The first question that arises is what it is that we understand by the release and tying-up of capital. Revaluation and devaluation, for their part, are self-explanatory. We simply mean that the capital present increases or decreases in value as the result of certain general economic conditions (since what is involved here is not the particular fate of one single private capital), i.e. that the value of the capital advanced to production rises or falls independently of its valorization by the surplus labour it employs.
By the tying-up of capital we mean that, out of the total value of the product, a certain additional proportion must be transformed back into the elements of constant or variable capital, if production is to continue on its old scale. By the release of capital we mean that a part of the product’s total value which previously had to be transformed back into either constant or variable capital becomes superfluous for the continuation of production, on the old scale and is now available for other purposes. The release or tying-up of capital is different from the release or tying-up of revenue. If the annual surplus-value on a capital C = x, for example, the cheapening of those commodities that go into the consumption of the capitalist may bring it about that x — a is sufficient to procure the same mass of satisfactions, etc. as before. A portion of the capitalist’s revenue = a is thus set free and can now serve either to expand his consumption or be transformed back into capital (accumulation). Conversely, if x + a is required in order to continue with the same mode of life, either this expenditure must be restricted or else a portion of income = a that was previously accumulated must now be spent as revenue.
The revaluation or devaluation of capital value may affect either constant or variable capital or both, and in the case of constant capital it can again relate to either the fixed or the constant portion or both.
In the case of constant capital we have to consider both raw materials, which we take as including also ancillary materials and semi-finished products, and also machinery and other fixed capital.
Previously, we considered variation in the price or value of the raw material with particular respect to the influence of this on the rate of profit, and put forward the general law that, with other things being equal, the rate of profit varies inversely as the value of the raw material. This law is unconditionally correct for capital that is newly engaged in a certain business and where the investment of capital, the transformation of money into productive capital, takes place for the first time.
But apart from this newly invested capital, a large part of the already functioning capital is located in the circulation sphere, only one portion being in the sphere of production. One part exists as a commodity on the market and has to be transformed into money; another part exists as money in some form or other and has to be transformed back into the conditions of production; a third part, finally, exists within the sphere of production, partly in the original form of means of production, raw material, ancillary material, semi-finished articles, machinery and other fixed capital purchased on the market, partly again as products still in the course of completion. The effect of a rise or fall in capital value depends here very largely on the respective proportions of these components. Let us firstly leave all fixed capital out of account for the sake of simplification and simply consider the part of the constant capital that consists of raw and ancillary materials, and commodities in the course of preparation and in finished form on the market.
If the price of a raw material rises – cotton for example – the price of cotton goods rises as well: both semi-finished goods such as yarn, and finished products such as cloth, etc. which are produced with this more expensive cotton. And cotton that has not yet been worked up, but is still in the warehouse, rises just as much in value as cotton that is in the course of manufacture. As the retrospective expression of more labour-time, this cotton adds a higher value to the product which it goes into as a component than it possessed originally and the capitalist paid for it.
Thus if an increase in the price of raw material takes place with a significant amount of finished goods already present on the market, at whatever stage of completion, then the value of these commodities rises and there is a corresponding increase in the value of the capital involved. The same applies to stocks of raw material, etc. in the hands of the producers. This revaluation can compensate the individual capitalist, or a whole particular sphere of capitalist production – even more than compensate, perhaps – for the fall in the rate of profit that follows from the raw material’s rise in price. Without going into the detailed effects of competition here, we may remark for the sake of completeness that (1) if there are substantial stocks of raw material in the warehouse, they counteract the price increase arising from the conditions of their production; (2) if the semi-finished or finished goods on the market press heavily on the supply, they may prevent the price of these goods from rising in proportion to the price of their raw material.
The reverse is the case with a fall in the price of raw material which would otherwise increase the rate of profit, if all other circumstances were the same. The commodities on the market, articles still in preparation and stocks of raw material are all devalued, and this counteracts the simultaneous rise in the rate of profit.
The smaller the amount of stock to be found in the production sphere and on the market at the end of the business year, at the time when raw materials are supplied afresh on a massive scale (or, in the case of agricultural production, after the harvest), the more visible the effect of a change in raw material prices.
Our whole investigation has proceeded from the assumption that any rise or fall in prices is an expression of real fluctuations in value. But since we are dealing here with the effect that these price fluctuations have on the profit rate, it is actually a matter of indifference what their basis might be. The present argument is just as valid if prices rise or fall not as a result of fluctuations in value, but rather as a result of the intervention of the credit system, competition, etc.
Since the rate of profit is equal to the proportionate excess in the value of the product over the value of the total capital advanced, an increase in the rate of profit that arose from a devaluation of the capital advanced would involve a loss in capital value, while a decline in the profit rate that arose from a rise in value of the capital advanced could well involve a gain.
As far as the other portion of constant capital is concerned, machinery and fixed capital in general, the revaluation that takes place here and particularly affects buildings, land, etc. cannot be explained without the theory of ground-rent and thus does not belong here. The following points, however, are of general importance for devaluation:
(1) The constant improvements which rob existing machinery, factories, etc. of a part of their use-value, and therefore also their exchange-value. This process is particularly significant at times when new machinery is first introduced, before it has reached a certain degree of maturity, and where it thus constantly becomes outmoded before it has had time to reproduce its value. This is one of the reasons for the unlimited extension of working hours that is usual in periods of this kind, work based on alternating day and night shifts, so that the value of the machines is reproduced without too great costs having to be borne for wear and tear. If the short working life of the machines (their short life-expectancy vis-à-vis prospective improvements) were not counter-balanced in this way, they would transfer too great a portion of their value to the product in the way of moral depreciation* and would not even be able to compete with handicraft production.15
Once machines, factory buildings or any other kind of fixed capital have reached a certain degree of maturity, so that they remain unchanged for a long while at least in their basic construction, a further devaluation takes place as a result of improvements in the methods of reproduction of this fixed capital. The value of machines, etc. now falls not because they are quickly supplanted or partially devalued by newer, more productive machines, etc., but because they can now be reproduced more cheaply. This is one of the reasons why large enterprises often flourish only under their second owners, after the first have gone bankrupt. The second owner, by buying them cheaply, starts production with a smaller outlay of capital.
It is particularly apparent in the case of agriculture how the same causes that raise or lower the price of the product also raise or lower the value of the capital, since this consists to a large extent of that product itself, e.g. corn or cattle. (Ricardo.)‡
*
The variable capital has still to be mentioned.
In as much as the value of labour-power rises because the value of the means of subsistence required for its reproduction rises, or conversely falls because the value of these means of subsistence falls (and a revaluation or devaluation of the variable capital can mean nothing more than these two cases), and assuming that the working day remains constant, a revaluation of this kind means a fall in surplus-value and a devaluation means a rise. However, other circumstances can also be linked with this, such as the release and tying-up of capital, which we have not yet investigated and should now indicate in brief.
If wages fall, owing to a fall in the value of labour-power (though this may even be associated with a rise in the actual price of labour), a portion of the capital previously laid out on wages is set free. There is a release of variable capital. For capital that is newly invested, this has simply the effect of enabling it to function at an increased rate of surplus-value. The same quantity of labour is set in motion with less money than before, and in this way the unpaid portion of labour is increased at the cost of the paid portion. But for capital that was already invested earlier, not only does the rate of surplus-value increase, but on top of this a portion of the capital previously laid out on wages is set free. This was formerly tied up and formed a portion constantly deducted from the proceeds of production, a portion which was laid out on wages and had to function as variable capital if the business was to proceed on the old scale. This portion now becomes available and can be used for new capital investment, whether to extend the same business or to function in another sphere of production.
Let us assume for example that £500 was originally required to set 500 workers in motion for a week, and that now only £400 is required for this. If the mass of value produced is £1,000 in each case, the mass of surplus-value was in the first case £500 per week, and the rate of surplus-value 100 per cent; after the fall in wages, however, the mass of surplus-value is £1,000 — £400 = £600, and its rate 600/400 = 150 per cent. And this increase in the rate of surplus-value is the only effect for someone opening a new business in that sphere of production with a variable capital of £400 and a corresponding constant capital. In a business that is already functioning, however, not only has the mass of surplus-value risen from £500 to £600 and the rate of surplus-value from 100 to 150 per cent, as a result of the devaluation of the variable capital; apart from this, £100 of variable capital has been set free, and this is now available to exploit more labour. Not only is the same amount of labour exploited more profitably, but the release of £100 enables the same variable capital of £500 to exploit more workers than before at the higher rate.
Now the other way round. If we take it that the original division of the product, with 500 workers employed, is 400ν + 600s = 1,000, the rate of surplus-value = 150 per cent. The worker thus receives a weekly wage of £ 4/5 = 16 shillings. If these 500 workers now cost £500 per week, as the result of a rise in the value of variable capital, the weekly wage of each rises to £1, and £400 can only set 400 workers in motion. If the same number of workers are set in motion as before, we have 500ν + 500s = 1,000; the rate of surplus-value would have fallen from 150 to 100 per cent, i.e. by a third. For a capital that is invested here for the first time, the only effect of this would be that the rate of surplus-value was lower. With conditions remaining otherwise the same, the rate of profit would accordingly have fallen, if not to the same degree. If for example c = 2,000, we have in the first case 2,000c + 400ν + 600s = 3,000; s‘ = 150 per cent, p′ = 600/2,400 = 25 percent; in the second case, 2,000c + 500ν + 500s = 3,000; s’ = 100 per cent, p′ = 500/2,500 = 20 per cent. For the capital already operating, on the other hand, the effect is a dual one. With £400 variable capital, only 400 workers can now be employed, and this is at a surplus-value rate of 100 per cent. The total surplus-value they produce is only £400. Moreover, since a constant capital of £2,000 now requires 500 workers to set it in motion, 400 workers only set in motion a constant capital of £1,600. Thus if production is to be continued on its former scale and a fifth of the machinery is not to come to a halt, the variable capital must be increased by £100, so that it can employ the same 500 workers as before. And this is possible only because capital that was formerly available is now tied up, in that part of the accumulation fund designed to expand the business now serves simply to fill the gap, or, alternatively, a portion designed to be spent as revenue is added to the original capital. With a £100 increase in the outlay of variable capital, £100 less surplus-value is then produced. More capital is needed to set the same number of workers in motion, and at the same time the surplus-value that each of these individual workers supplies is reduced.
The advantages that arise from the release of variable capital, and the disadvantages that arise from its being tied up, both exist only for capital that is already in operation and thus reproduces itself in given conditions. For capital that is to be newly invested, the advantage or disadvantage is in each case confined to this: there will occur a rise or fall in the rate of surplus-value and a corresponding if not proportionate change in the rate of profit.
*
The release and tying-up of variable capital that has just been investigated is the result of the devaluation and revaluation of the elements of variable capital, i.e. the costs of reproduction of labour-power. Variable capital can also be set free if the development of productivity leads to a reduction in the number of workers required to set the same amount of constant capital in motion, with the rate of wages remaining the same. In the reverse sense, additional variable capital may be tied up if more workers are required for the same amount of constant capital, owing to a decline in the productivity of labour. If a portion of the capital earlier applied as variable capital is now applied in the form of constant capital, however, i.e. if there is only a different distribution of the component elements of the same capital, then although this certainly has an influence on the rate of surplus-value and the rate of profit, it does not come under the heading of the tying-up and release of capital that we are considering here.
As we already saw, constant capital can also be tied up or released as the result of a rise or fall in the value of its material elements. Apart from this, constant capital can be tied up (without a part of the variable capital being transformed into constant) only if the productivity of labour increases, i.e. if the same amount of labour produces a larger product and therefore sets more constant capital in motion. The same thing can happen in certain circumstances if productivity declines, as in agriculture for example, so that the same amount of labour needs more means of production to produce the same product, e.g. a greater amount of seed, fertilizer, drainage, etc. Constant capital can be released without any devaluation if improvements, the harnessing of natural forces, etc. place a constant capital of lesser value in a position technically to perform the same service as one of higher value did earlier.
We saw in Volume 2 how, after commodities are transformed into money, are sold, a definite portion of this money must be transformed back into the material elements of constant capital, and moreover in the proportions that are required by the specific technical character of the sphere of production in question. Ignoring wages, i.e. variable capital, the most important element in all branches of production is raw material, including the ancillary materials that are particularly important in branches of production which do not involve any raw material proper, as with mining and the extractive industries in general. The portion of the price which must replace the wear-and-tear of the machinery enters the account more in an ideal sense, as long as the machinery is still at all serviceable; it does not very much matter whether it is paid for and converted into money today or tomorrow, or at any particular point in the capital’s turnover time. It is different with the raw material. If its price rises, it may be impossible to replace it completely after deducting wages from the value of the commodity. Violent fluctuations in price thus lead to interruptions, major upsets and even catastrophes in the reproduction process. It is particularly agricultural products, whose raw materials derive from organic nature, that are most subject to these fluctuations in value, as a result of variations in the harvest, etc. (Quite apart from the impact of the credit system.) The same quantity of labour may here be expressed in very diverse amounts of use-values, depending on uncontrollable natural conditions, the seasons of the year, etc., and a particular quantity of these use-values will accordingly have very different prices. If a value x is expressed in 100 lb. of a commodity a, the price of 1 lb. of a is x/100; if it is expressed in 1,000 lb. of a, the price of 1 lb. is x/1000; and so on. This is one element in the price fluctuations of raw materials. A second element is this – and we mention it here only for the sake of completeness, since competition and the credit system both still lie outside the orbit of our discussion. In the nature of the case, plant and animal products, whose growth and production are subject to certain organic laws involving naturally determined periods of time, cannot suddenly be increased in the same degree as, say, machines and other fixed capital, coal, ore, etc., which, assuming the requisite natural conditions, can be significantly increased in a very short period in an industrially developed country. It is possible, therefore, and indeed unavoidable when capitalist production is fully developed, that the production and increase of the portion of constant capital that consists of fixed capital, machinery, etc. may run significantly ahead of the portion consisting of organic raw materials, so that the demand for these raw materials grows more rapidly than their supply, and their price therefore rises. This rise in price leads to the following changes: (1) these raw materials are supplied from a greater distance, since the rise in their price can meet greater costs of transport; (2) their production is expanded, though by the nature of things the volume of products can only increase a year later; and (3) all kinds of surrogates are now employed that were previously unused, and more economical use is made of waste products. When the price rise begins to have a marked effect on the expansion of production and supply, the turning-point has generally been already reached, at which demand falls as a consequence of the continuing increase in the price of the raw material and of all commodities it enters into as an element, bringing about a reaction in its turn on the raw material’s price. Apart from the convulsions that achieve this effect by devaluing capital in various ways, still other circumstances come into play, which we must now go on to mention.
First of all, however, one thing should be clear from what has already been said. The more capitalist production is developed, bringing with it greater means for a sudden and uninterrupted increase in the portion of the constant capital that consists of machinery, etc., and the more rapid the accumulation (particularly in times of prosperity), the greater is the relative overproduction of machinery and other fixed capital, the more frequent the relative overproduction of plant and animal raw materials, and the more marked the previously described rise in their price and the corresponding reaction. The more frequent, therefore, are those revulsions which have their basis in this violent price fluctuation, and are a major element in the reproduction process.
When these high prices collapse, because their rise has provoked a decline in demand as well as an expansion of production, a supply from distant regions that were previously drawn on far less, if at all, and consequently a situation in which the supply of raw materials overtakes the demand, then the result can be considered from different aspects. The sudden collapse in the price of raw materials places shackles on their reproduction, and in this way the monopoly of the original supplying countries, which produce in favourable conditions, is re-established – perhaps with certain limitations, but re-established anyhow. The impulse that was given may indeed cause the reproduction of the raw materials to proceed on an expanded scale, particularly in those countries that more or less possess a monopoly in this production. But the basis on which production proceeds as a result of the expanded machinery, etc. and which must now prevail as the new normal basis, after a few fluctuations, has been very much expanded by the events of the previous turnover cycle. Among some of the secondary sources of supply, however, the reproduction that has at first increased will have again experienced a significant restriction. The export tables readily show how during the last thirty years (up to 1865) Indian cotton production has risen whenever there has been a shortfall in American production and then suddenly contracted more or less seriously. In periods when raw materials become dearer, the industrial capitalists get together and form associations to regulate production. This was the case for instance in 1848, in Manchester, after the rise in cotton prices, and similarly for the production of flax in Ireland. As soon as the immediate impulse has gone by and the general principle of competition (‘buying in the cheapest market’) reigns sovereign once more, instead of promoting productive capacity in suitable countries of origin, which these associations set out to do, irrespective of the immediate momentary price at which these countries can supply the product, it is left once more to ‘prices’ to regulate supply. All ideas of a common, all-embracing and far-sighted control over the production of raw materials – a control that is in fact incompatible, by and large, with the laws of capitalist production, and hence remains forever a pious wish, or is at most confined to exceptional common steps in moments of great and pressing danger and perplexity – all such ideas give way to the belief that supply and demand will mutually regulate one another.16 The capitalists’ superstition on this matter is so crude that even the factory inspectors pass astonished remarks on it time and again in their reports. The alternation of good and bad years, of course, does bring cheaper raw materials round again. Apart from the immediate effect that this has on extending demand, the effect on the profit rate that we have already mentioned also serves as a stimulus. And the process depicted above, with the production of raw materials being gradually overtaken again by the production of machines, etc., is then repeated once more on a larger scale. Any actual improvement in the raw material, so that not only the required quantity was supplied, but also the required quality, for instance American-quality cotton from India, would necessitate a regular and steady rise in European demand over a long period (quite apart from the economic conditions to which Indian production is subject in its own country). The production of raw materials is thus expanded only in sudden jerks, before being violently contracted once more. This can all be studied very well, as indeed can the spirit of capitalist production in general, from the cotton famine of 1861–5, a situation in which a raw material that is one of the most essential elements of reproduction was quite lacking for a time. Prices can also rise in a situation of full supply, if this is full only under difficult conditions. Alternatively there may be a genuine lack of raw material. In the cotton crisis, we had originally the latter case.
The more we look back at the history of production in the most recent period, the more regularly we find, particularly in the key branches of industry, a constantly repeated alternation between relative price increase and a subsequent depreciation of raw materials supplied by organic nature that arises from this. The above arguments are illustrated by the following example taken from the reports of the Factory Inspectorate.
The moral of the tale, which can also be extracted from other discussions of agriculture, is that the capitalist system runs counter to a rational agriculture, or that a rational agriculture is incompatible with the capitalist system (even if the latter promotes technical development in agriculture) and needs either small farmers working for themselves or the control of the associated producers.
*
We now give the illustrations from the English factory reports promised above.
‘The state of trade is better; but the cycle of good and bad times diminishes as machinery increases, and the changes from the one to the other happen oftener, as the demand for raw materials increases with it… At present, confidence is not only restored after the panic of 1857, but the panic itself seems to be almost forgotten. Whether this improvement will continue or not depends greatly upon the price of raw materials. There appear to me evidences already, that in some instances the maximum has been reached, beyond which their manufacture becomes gradually less and less profitable, till it ceases to be so altogether. If we take, for instance, the lucrative years in the worsted trade of 1849 and 1850, we see that the price of English combing wool stood at 1s. 1d., and of Australian at between 1s. 2d. and 1s. 5d. per lb., and that on the average of the ten years from 1841 to 1850, both inclusive, the average price of English wool never exceeded 1s. 2d. and of Australian wool 1s. 5d. per lb. But that in the commencement of the disastrous year of 1857, the price of Australian wool began with 1s. 11d., falling to 1s. 6d. in December, when the panic was at its height, but has gradually risen again to 1s. 9d. through 1858, at which it now stands; whilst that of English wool, commencing with 1s. 8d., and rising in April and September 1857 to 1s. 9d., falling in January 1858 to 1s. 2d., has since risen to 1s. 5d., which is 3d. per lb. higher than the average of the ten years to which I have referred… This shows, I think, one of three things, – either that the bankruptcies which similar prices occasioned in 1857 are forgotten; or that there is barely the wool grown which the existing spindles are capable of consuming; or else, that the prices of manufactured articles are about to be permanently higher… And as in past experience I have seen spindles and looms multiply both in numbers and speed in an incredibly short space of time, and our exports of wool to France increase in an almost equal ratio, and as both at home and abroad the age of sheep seems to be getting less and less, owing to increasing populations and to what the agriculturalists call “a quick return on stock”, so I have often felt anxious for persons whom, without this knowledge, I have seen embarking skill and capital in undertakings, wholly reliant for their success on a product which can only be increased according to organic laws… The same state of supply and demand of all raw materials… seems to account for many of the fluctuations in the cotton trade during past periods, as well as for the condition of the English wool market in the autumn of 1857, with its over-whelming consequences’ (R. Baker in Reports of the Inspectors of Factories… 31 October 1858, pp. 56–61).17
The high point of the worsted industry in the West Riding of Yorkshire was 1849–50. The number of persons employed in it was 29,246 in 1838, 37,060 in 1843,48,097 in 1845, and 74,891 in 1850. In the same region there were 2,768 power-looms in 1838, with 11,458 in 1841, 16,870 in 1843, 19,121 in 1845 and 29,539 in 1850. (Reports of the Inspectors of Factories… 31 October 1850, p. 60.) This burgeoning prosperity was already beginning to wear thin in October 1850. In his report for April 1851, sub-inspector Baker says of Leeds and Bradford: ‘The state of trade is, and has been for some time, very unsatisfactory. The worsted spinners are fast losing the profits of 1850, and, in the majority of cases, the manufacturers are not doing much good. I believe, at this moment, there is more woollen machinery standing than I have almost ever known at one time, and the flax spinners are also turning off hands and stopping frames. The cycles of trade, in fact, in the textile fabrics, are now extremely uncertain, and I think we shall shortly find to be true… that there is no comparison made between the producing power of the spindles, the quantity of raw material, and the growth of the population’ (Reports of the Inspectors of Factories… 30 April 1851, p. 52).
The same applies to the cotton industry. In the report for October 1858 that has already been quoted, we read: ‘Since the hours of labour in factories have been fixed, the amounts of consumption, produce, and wages in all textile fabrics have been reduced to a rule of three… I quote from a recent lecture delivered by… the present Mayor of Blackburn, Mr Baynes, on the cotton trade, who by such means has reduced the cotton statistics of his own neighbourhood to the closest approximation:
‘“Each real and mechanical horse-power will drive 450 self-acting mule spindles with preparation, or 200 throstle spindles, or 15 looms for 40 inches cloth, with winding, warping, and sizing. Each horse-power in spinning will give employment to 2 1/2 operatives, but in weaving to 10 persons, at wages averaging full 10s. 6d. a week to each person… The average counts of yarn spun and woven are from 30s. to 32s. twist, and 34s. to 36s. weft yarns; and taking the spinning production at 13 ounces per spindle per week, will give 824,700 lbs. yarn spun per week, requiring 970,000 lbs. or 2,300 bales of cotton, at a cost of £28,300… The total cotton consumed in this district (within a five-mile radius round Blackburn) per week is 1,530,000 lbs., or 3,650 bales, at a cost of £44,625… This is one-eighteenth of the whole cotton spinning of the United Kingdom, and one-sixth of the whole power-loom weaving.”
‘Thus we see that, according to Mr Baynes’s calculations, the total number of cotton spindles in the United Kingdom is 28,800,000, and supposing these to be always working full time, that the annual consumption of cotton ought to be 1,432,080,000 lbs. But as the import of cotton, less the export in 1856 and 1857, was only 1,022,576,832 lbs., there must necessarily be a deficiency of supply equal to 409,503,168 lbs. Mr Baynes, however, who has been good enough to communicate with me on this subject, thinks that an annual consumption of cotton based upon the quantity used in the Blackburn district would be liable to be overcharged, owing to the difference, not only in the counts spun, but in the excellence of the machinery. He estimates the total annual consumption of cotton in the United Kingdom at 1,000,000,000 lbs. But if he is right, and there really is an excess of supply equal to 22,576,832 lbs., supply and demand seem to be nearly balanced already, without taking into consideration those additional spindles and looms which Mr Baynes speaks of as getting ready for work in his own district, and, by parity of reasoning, probably in other districts also’ (pp. 59, 60).
1845. High tide of the cotton industry. Cotton prices very low. Leonard Horner says on this subject: ‘For the last eight years I have not known so active a state of trade as has prevailed during the last summer and autumn, particularly in cotton spinning. Throughout the half-year I have been receiving notices every week of new investments of capital in factories, either in the form of new mills being built, of the few that were untenanted finding occupiers, of enlargements of existing mills, of new engines of increased power, and of manufacturing machinery’ (Reports of the Inspectors of Factories… 57 October 1845, p. 13). 1846. Complaints begin. ‘For a considerable time past I have heard from the occupiers of cotton-mills very general complaints of the depressed state of their trade… for within the last six weeks several mills have begun to work short time, usually eight hours a day instead of twelve; this appears to be on the increase… There has been a great advance in the price of the raw material,… there has been not only no advance in the manufactured articles, but… prices are lower than they were before the rise in cotton began. From the great increase in the number of cotton mills within the last four years, there must have been, on the one hand, a greatly increased demand for the raw material, and, on the other, a greatly increased supply in the market of the manufactured articles; causes that must concurrently have operated against profits, supposing the supply of the raw material and the consumption of the manufactured article to have remained unaltered; but, of course, in the greater ratio by the late short supply of cotton, and the falling off in the demand for the manufactured articles in several markets, both home and foreign’ (Reports of the Inspectors of Factories… 31 October 1846, p. 10).
A rising demand for raw material naturally goes hand in hand with an excess supply of finished goods on the market. The expansion of industry at that time, incidentally, and the subsequent stagnation, were not confined to the cotton districts. In the worsted centre of Bradford, there were 490 mills in 1846, as against only 318 in 1836. These figures do not nearly begin to express the actual rise in production, as existing mills were also significantly expanded at the same time. This is true above all of flax-spinning. ‘All have contributed more or less, during the last ten years, to the overstocking of the market, to which a great part of the present stagnation of trade must be attributed… The depression… naturally results from such rapid increase of mills and machinery’ (Reports of the Inspectors of Factories… 31 October 1846, p. 30).
1847. Monetary crisis in October. Bank rate at 8 per cent. There had already occurred the collapse of the railway bubble, and the speculation in East Indian bills. However:
‘Mr Baker enters into very interesting details, respecting the increased demand, in the last few years, for cotton, wool, and flax, owing to the great extension of these trades. He considers the increased demand for these raw materials, occurring, as it has, at a period when the produce has fallen much below an average supply, as almost sufficient, even without reference to the monetary derangement, to account for the present state of these branches. This opinion is fully confirmed, by my own observations and conversation with persons well acquainted with trade. Those several branches were all in a very depressed state, while discounts were readily obtained at and under 5 per cent. The supply of raw silk has, on the contrary, been abundant, the prices moderate, and the trade, consequently, very active, till… the last two or three weeks, when there is no doubt the monetary derangement has affected not only the persons actually engaged in the manufacture, but more extensively still, the manufacturers of fancy goods, who were great customers to the throwster. A reference to published returns shows that the cotton trade had increased nearly 27 per cent in the last three years. Cotton has consequently increased, in round numbers, from 4d. to 6d. per lb., while twist, in consequence of the increased supply, is yet only a fraction above its former price. The woollen trade began its increase in 1836, since which Yorkshire has increased its manufacture of this article 40 per cent, but Scotland exhibits a yet greater increase. The increase of the worsted trade18 is still larger. Calculations give a result of upwards of 74 per cent increase within the same period. The consumption of raw wool has therefore been immense. Flax has increased since 1839 about 25 per cent in England, 22 per cent in Scotland, and nearly 90 per cent in Ireland;19 the consequence of this, in connexion with bad crops, has been that the raw material has gone up £10 per ton, while the price of yarn has fallen 6d. a bundle’ (Reports of the Inspectors of Factories…31 October 1847, pp. 30–31).
1849. Business was picking up again from the last months of 1848 onwards. ‘The price of flax, which has been so low as to almost guarantee a reasonable profit under any future circumstances, has induced the manufacturers to carry on their work very steadily… The woollen manufacturers were exceedingly busy for a while in the early part of the year… I fear that consignments of woollen goods often take the place of real demand, and that periods of apparent prosperity, i.e., of full work, are not always periods of legitimate demand. In some months the worsted has been exceedingly good, in fact flourishing… At the commencement of the period referred to, wool was exceedingly low; what was bought by the spinners was well bought, and no doubt in considerable quantities. When the price of wool rose with the spring wool sales, the spinner had the advantage, and the demand for manufactured goods becoming considerable and imperative, they kept it’ (Reports of the Inspectors of Factories… 30 April 1849, p. 42).
‘If we look at the variations in the state of trade, which have occurred in the manufacturing districts of the kingdom for a period now of between three and four years, I think we must admit the existence of a great disturbing cause somewhere… but may not the immensely productive power of increased machinery have added another element to the same cause?’ (Reports of the Inspectors of Factories… 30 April 1849, pp. 42, 43).
In November 1848, May 1849 and during the summer through to October, business became ever more lively. ‘The worsted stuff of trade, of which Bradford and Halifax are the great hives of industry, has been the one most active; this trade has never before reached anything like the extent, to which it has now attained… Speculation, and uncertainty as to the probable supply of cotton wool, have ever had the effect of causing greater excitement, and more frequent alterations in the state of that branch of manufacture, than any other. There is… at present an accumulation in stock of the coarser kinds of cotton goods, which creates anxiety on the part of the smaller spinners, and is already acting to their detriment, having caused several of them to work their mills short time’ (Reports of the Inspectors of Factories… 31 October 1849, pp. 64–5).
1850. April. Brisk trade continues. The exception: ‘The great depression in a part of the cotton trade… attributable to the scarcity in the supply of the raw material more especially adapted to the branch engaged in spinning low numbers of cotton yarns, or manufacturing heavy cotton goods. A fear is entertained that the increased machinery built recently for the worsted trade, may be followed with a similar reaction. Mr Baker computes that in the year 1849 alone the worsted looms have increased their produce 40 per cent, and the spindles 25 or 30 per cent, and they are still increasing at the same rate’ (Reports of the Inspectors of Factories… 30 April 1850, p. 54).
1850. October. ‘The high price of raw cotton continues… to cause a considerable depression in this branch of manufacture, especially in those descriptions of goods in which the raw material constitutes a considerable part of the cost of production… The great advance in the price of raw silk has likewise caused a depression in many branches of that manufacture’ (Reports of the Inspectors of Factories… 31 October 1850, p. 14).
According to the report of the committee of the Royal Society for the Promotion and Improvement of the Growth of Flax in Ireland, as quoted here, the high price of flax, combined with a low price level for other agricultural products, ensured a significant increase in flax production for the following year (p. 33).
1853. April. Extreme prosperity. L. Horner says in his report: ‘At no period during the last seventeen years that I have been officially acquainted with the manufacturing districts in Lancashire have I known such general prosperity; the activity in every branch is extraordinary’ (Reports of the Inspectors of Factories… 30 April 1853, p. 19).
1853. October. Depression in the cotton industry. ‘Overproduction’ (Reports of the Inspectors of Factories… 31 October 1853, p. 15).
1854. April. ‘The woollen trade, although not brisk, has given full employment to all the factories engaged upon that fabric, and a similar remark applies to the cotton factories. The worsted trade generally has been in an uncertain and unsatisfactory condition during the whole of the last half-year… The manufacture of flax and hemp are more likely to be seriously impeded, by reason of the diminished supplies of the raw materials from Russia due to the Crimean war’ (Reports of the Inspectors of Factories… 30 April 1854, p. 37).
1859. ‘The trade in the Scottish flax districts still continues depressed – the raw material being scarce, as well as high in price; and the inferior quality of the last year’s crop in the Baltic, from whence come our principal supplies, will have an injurious effect on the trade of the district; jute, however, which is gradually superseding flax in many of the coarser fabrics, is neither unusually high in price, nor scarce in quantity… about one half of the machinery in Dundee is now employed in jute spinning’ (Reports of the Inspectors of Factories… 30 April 1859, p. 19). ‘Owing to the high price of the raw material, flax spinning is still far from remunerating, and while all the other mills are going full time, there are several instances of the stoppage of flax machinery… Jute spinning is… in a rather more satisfactory state, owing to the recent decline in the price of material, which has now fallen to a very moderate point’ (Reports of the Inspectors of Factories… 31 October 1859, p. 20).
1861–4. American Civil War. Cotton Famine. The Biggest Example of an Interruption in the Production Process Caused by a Lack of Raw Material and an Increase in its Price.
1860. April. ‘With respect to the state of trade, I am happy to be able to inform you that, notwithstanding the high price of raw material, all the textile manufactures, with the exception of silk, have been fairly busy during the past half-year… In some of the cotton districts hands have been advertised for, and have migrated thither from Norfolk and other rural counties… There appears to be, in every branch of trade, a great scarcity of raw material. It is… the want of it alone, which keeps us within bounds. In the cotton trade, the erection of new mills, the formation of new systems of extension, and the demand for hands, can scarcely, I think, have been at any time exceeded. Everywhere there are new movements in search of raw material’ (Reports of the Inspectors of Factories… 30 April 1860, p. 57).
1860. October. ‘The state of trade in the cotton, woollen, and flax districts has been good; indeed in Ireland, it is stated to have been “very good” for now more than a year; and that it would have been still better, but for the high price of raw material. The flax spinners appear to be looking with more anxiety than ever to the opening out of India by railways, and to the development of its agriculture, for a supply of flax which may be commensurate with their wants’ (Reports of the Inspectors of Factories… 31 October 1860, p. 37).
1861. April. ‘The state of trade is at present depressed… A few cotton mills are running short time, and many silk mills are only partially employed. Raw material is high. In almost every branch of textile manufacture it is above the price at which it can be manufactured for the masses of the consumers’ (Reports of the Inspectors of Factories… 30 April 1861, p. 33).
It had become evident that 1860 was a year of overproduction in the cotton industry; the effect of this was still making itself felt in subsequent years. ‘It has taken between two and three years to absorb the overproduction of 1860 in the markets of the world’ (Reports of the Inspectors of Factories… 31 October 1863, p. 127). ‘The depressed state of the markets for cotton manufactures in the East, early in 1860, had a corresponding effect upon the trade of Blackburn, in which 30,000 power-looms are usually employed almost exclusively in the production of cloth to be consumed in the East. There was consequently but a limited demand for labour for many months prior to the effects of the cotton blockade being felt… Fortunately this preserved many of the spinners and manufacturers from being involved in the common ruin. Stocks increased in value so long as they were held, and there had been consequently nothing like that alarming depreciation in the value of property which might not unreasonably have been looked for in such a crisis’ (Reports of the Inspectors of Factories … 31 October 1862, pp. 29, 31).
1861. October. ‘Trade has been for some time in a very depressed state… It is not improbable indeed that during the winter months many establishments will be found to work very short time. This might, however, have been anticipated… irrespective of the causes which have interrupted our usual supplies of cotton from America and our exports, short time must have been kept during the ensuing winter in consequence of the great increase of production during the last three years, and the unsettled state of the Indian and Chinese markets’ (Reports of the Inspectors of Factories… 31 October 1861, p. 19).
Cotton Waste. East Indian Cotton (Surat). Influence on Wages. Improvements in Machinery. Replacement of Cotton by Starch Flour and Minerals. Effect of this Starch Flour Sizing on the Workers. Manufacturers of Finer Grades of Yarn. Factory-Owners’ Fraud
‘A manufacturer writes to me thus: “As to estimates of consumption per spindle, I doubt if you take sufficiently into calculation the fact that when cotton is high in price, every spinner of ordinary yarns (say up to 40s.) (principally 12s. to 32s.) will raise his counts as much as he can, that is, will spin 16s. where he used to spin 12s., or 22s. in the place of 16s., and so on; and the manufacturer using these fine yarns will make his cloth the usual weight by the addition of so much more size. The trade is availing itself of this resource at present to an extent which is even discreditable. I have heard on good authority of ordinary export shirting weighing 8 lbs. which was made of 5 1/4 lbs. cotton and 2 1/2 lbs. size… In cloths of other descriptions as much as 50 per cent size is sometimes added; so that a manufacturer may and does truly boast that he is getting rich by selling cloth for less money per pound than he paid for the mere yarn of which they are composed ”’ (Reports of the Inspectors of Factories… 30 April 1864, p. 27).
‘I have also received statements that the weavers attribute increased sickness to the size which is used in dressing the warps of Surat cotton, and which is not made of the same material as formerly, viz., flour. This substitute for flour is said, however, to have the very important advantage of increasing greatly the weight of the cloth manufactured, making 15 lbs. of the raw material to weigh 20 lbs. when woven into cloth’ (Reports of the Inspectors of Factories…31 October 1863, p. 63. This substitute was ground talcum, called China clay, or gypsum, called French chalk). ‘The earnings of the weavers’ (meaning the operatives) ‘are much reduced from the employment of substitutes for flour as sizing for warps. This sizing, which gives weight to the yarn, renders it hard and brittle. Each thread of the warp in the loom passes through a part of the loom called “a heald”, which consists of strong threads to keep the warp in its proper place, and the hard state of the warp causes the threads of the heald to break frequently; and it is said to take a weaver five minutes to tie up the threads every time they break; and a weaver has to piece these ends at least ten times as often as formerly, thus reducing the productive powers of the loom in the working-hours’ (ibid., pp. 42–3).
‘In Ashton, Stalybridge, Mossley, Oldham, etc., the reduction of the time has been fully one-third, and the hours are lessening every week… Simultaneously with this diminution of time there is also a reduction of wages in many departments’ (Reports of the Inspectors of Factories… 31 October 1861, pp. 12–13).
At the beginning of 1861 there was a strike of power-loom weavers in certain parts of Lancashire. Various factory-owners had announced a reduction in wages of from 5 to 7 1/2 per cent. The operatives insisted that wage-rates should be kept the same and working hours cut instead. This was not conceded, and the strike began. After a month, the workers had to admit defeat. They then suffered both things: ‘In addition to the reduction of wages to which the operatives at last consented, many mills are now running short time’ (Reports of the Inspectors of Factories… 30 April 1861, p. 23int1.html#page_23).
1862. April. ‘The sufferings of the operatives since the date of my last report have greatly increased; but at no period of the history of manufactures, have sufferings so sudden and so severe been borne with so much silent resignation and so much patient self-respect’ (Reports of the Inspectors of Factories… 30 April 1862, p. 10). ‘The proportionate number of operatives wholly out of employment at this date appears not to be much larger than it was in 1848, when there was an ordinary panic of sufficient consequences to excite alarm amongst the manufacturers, so much as to warrant the collection of similar statistics of the state of the cotton trade as are now issued weekly… In May 1848, the pro portion of cotton operatives out of work in Manchester out of the whole number usually employed was 15 per cent, on short time 12 per cent, while 70 per cent were in full work. On the 28th of May of the present year, of the whole number of persons usually employed 15 per cent were out of work, 35 per cent were on short time, and 49 per cent were working full time… In some other places, Stockport for example, the averages of short time and of non-employment are higher, whilst those of full time are less,’ because coarser grades are spun there than in Manchester (p. 16).
1862. October. ‘I find by the last return to Parliament that there were 2,887 cotton factories in the United Kingdom in 1861, 2,109 of them being in my district (Lancashire and Cheshire). I was aware that a very large proportion of the 2,109 factories in my district were small establishments, giving employment to few persons, but I have been surprised to find how large that proportion is. In 392, or 19 per cent, the steam-engine or water-wheel is under 10 horse-power; in 345, or 16 per cent, the horse-power is above 10 and under 20; and in 1,372 the power is 20 horses and more… A very large proportion of these small manufacturers – being more than a third of the whole number – were operatives themselves at no distant period; they are men without command of capital… The brunt of the burden then would have to be borne by the remaining two-thirds’ (Reports of the Inspectors of Factories…31 October 1862, pp. 18, 19).
According to the same report, only 40,146 cotton workers in Lancashire and Cheshire were at that time fully employed, or 11.3 per cent of the total; 134,767 or 38 per cent were working short-time, and 179,721 or 50.7 per cent were unemployed. If we subtract the figures for Manchester and Bolton, where it is principally finer grades of yarn that are spun, the situation was even worse, i.e. fully employed 8.5 per cent, on short-time 38 per cent, unemployed 53.5 per cent (pp. 19, 20).
‘Working up good or bad cotton makes a material difference to the operative. In the earlier part of the year, when manufacturers were endeavouring to keep their mills at work by using up all the moderately priced cotton they could obtain, much bad cotton was brought into mills in which good cotton was ordinarily used, and the difference to the operatives in wages was so great that many strikes took place on the ground that they could not make a fair day’s wages at the old rates… In some cases, although working full time, the difference in wages from working bad cotton was as much as one half (p. 27).
1863. April. ‘During the present year there will not be full employment for much more than one half of the cotton operatives in the country’ (Reports of the Inspectors of Factories…30 April 1863, p. 14).
‘A very serious objection to the use of Surat cotton, as manufacturers are now compelled to use it, is that the speed of the machinery must be greatly reduced in the processes of manufacture. For some years past every effort has been made to increase the speed of machinery, in order to make the same machinery produce more work; and the reduction of the speed becomes therefore a question which affects the operative as well as the manufacturer; for the chief part of the operatives are paid by the work done; for instance, spinners are paid per lb. for the yarn spun, weavers per piece for the number of pieces woven; and even with the other classes of operatives paid by the week there would be a diminution of wages in consideration of the less amount of goods produced. From inquiries I have made, and statements placed in my hands, of the earnings of cotton operatives during the present year, I find there is a diminution averaging 20 per cent upon their former earnings, in some instances the diminution has been as much as 50 per cent, calculated upon the same rate of wages as prevailed in 1861’(p. 13). ‘… The sum earned depends upon… the nature of the material operated upon… The position of the operatives in regard to the amount of their earnings is very much better now’ (October 1863) ‘than it was this time last year. Machinery has improved, the material is better understood, and the operatives are able better to overcome the difficulties they had to contend with at first. I remember being in a sewing school’ (a charity institution for unemployed) ‘at Preston last spring, when two young women, who had been sent to work at a weaving shed the day before, upon the representation of the manufacturer that they could earn 4s. per week, returned to the school to be readmitted, complaining that they could not have earned 1s. per week. I have been informed of “self-actingminders”… men who manage a pair of self-acting mules, earning at the end of a fortnight’s full work 8s. 11d., and that from this sum was deducted the rent of the house, the manufacturer, however, returning half the rent as a gift.’ (How generous!) ‘The minders took away the sum of 6s. 11d. In many places the self-acting minders ranged from 5s. to 9s. per week, and the weavers from 2s. to 6s. per week in the last months of 1862… At the present time a much more healthy state of things exists, although there is still a great decrease in the earnings in most districts… There are several causes which have tended to the reduction of earnings, besides the shorter staple of the Surat cotton and its dirty condition; for instance, it is now the practice to mix “waste” largely with Surat, which consequently increases the difficulties of the spinner or minder. The threads, from their shortness of fibre, are more liable to break in the drawing out of the mule and in the twisting of the yarn, and the mule cannot be kept so continuously in motion… Then, from the great attention required in watching the threads in weaving, many weavers can only mind one loom, and very few can mind more than two looms… There has been a direct reduction of 5, 7 1/2 and 10 per cent upon the wages of the operatives… In the majority of cases the operative has to make the best of his material, and to earn the best wages he can at the ordinary rates… Another difficulty the weavers have sometimes to contend with is, that they are expected to produce well-finished cloth from inferior materials, and are subject to fine for the flaws in their work’ (Reports of the Inspectors of Factories… 31 October 1863, pp. 41–3).
Wages were wretched enough even with full-time working. The cotton workers willingly volunteered for all the public works they could be employed in, such as drainage, road-building, stone-breaking and street-paving, so as to get relief (which was in effect a form of relief to the factory-owners; see Volume 1, pp. 720–21) from the local authorities. The entire bourgeoisie stood guard over the workers. If starvation wages were offered and a worker was unwilling to accept them, the Relief Committee struck him off the relief list. This was a real golden age for the factory-owning gentlemen, in as much as the workers either starved or had to work at the price most profitable for the bourgeoisie, while the Relief Committees acted as their guard-dogs. The factory-owners also placed obstacles to emigration, as far as they could, in secret agreement with the government, partly so as to keep their capital in constant readiness (in the form of the workers’ flesh and blood), partly to make sure of the rent they extorted from the workers for their dwellings.
‘The Relief Committees acted with great strictness upon this point. If work was offered, the operatives to whom it was proposed were struck off the lists, and thus compelled to accept the offer. When they objected to accept work… the cause has been that their earnings would have been merely nominal, and the work exceedingly severe’ (Reports of the Inspectors of Factories… 31 October 1863, p. 97).
The workers were prepared to do any kind of work they were put to under the Public Works Act. ‘The principle upon which industrial employments were organized varied considerably in different towns, but in those places even in which the outdoor work was not absolutely a labour test the manner in which labour was remunerated by its being paid for either at the exact rate of relief, or closely approximating the rate, it became in fact a labour test’ (p. 69). ‘The Public Works Act of 1863 was intended to remedy this inconvenience, and to enable the operative to earn his day’s wages as an independent labourer. The purpose of this Act was three-fold: firstly, to enable local authorities to borrow money of the Exchequer Loan Commissioners’ (with consent of the President of the Central Relief Committee); ‘secondly, to facilitate the improvement of the towns of the cotton districts; thirdly, to provide work and remunerative wages to the unemployed operatives.’
By the end of October 1863, loans to the sum of £883,700 had been granted under this Act (p. 70). The works undertaken were chiefly the digging of canals, road-building, street-paving, construction of reservoirs, etc.
Mr Henderson, President of the Blackburn Relief Committee, writes on this subject to factory inspector Redgrave: ‘Nothing in my experience, during the present period of suffering and distress, has struck me more forcibly or given me more satisfaction, than the cheerful alacrity with which the unemployed operatives of this district have accepted of the work offered to them through the adoption of the Public Works Act, by the Corporation of Blackburn. A greater contrast than that presented between the cotton spinner as a skilled workman in a factory, and as a labourer in a sewer 14 or 18 feet deep, can scarcely be conceived.’ (Depending on the size of their families, the workers were entitled to a sum of from 4 to 12 shillings per week, the latter figure, a truly colossal amount, often having to suffice for a family of eight persons. The municipal philistines profited from this in two ways. Firstly, they received money for improving their smoky and neglected towns at exceptionally low rates of interest; secondly, they paid the workers far below the regular wage-rates.) ‘Accustomed as he had been to a temperature all but tropical, to work at which agility and delicacy of manipulation availed him infinitely more than muscular strength, and to double and sometimes treble the remuneration which it is possible for him now to obtain, his ready acceptance of the proffered employment involved an amount of self-denial and consideration the exercise of which is most creditable. In Blackburn the men have been tested at almost every variety of outdoor work; in excavating a stiff heavy clay soil to a considerable depth, in draining, in stone-breaking, in road-making, and in excavating for street sewers to a depth of 14, 16, and sometimes 20 feet. In many cases while thus employed they are standing in mud and water to the depth of 10 or 12 inches, and in all they are exposed to a climate which, for chilly humidity, is not surpassed I suppose, even if it is equalled, by that of any district in England’ (pp. 91–2). ‘The conduct of the operatives has been almost blameless, and their readiness to accept and make the best of outdoor labour’ (p. 69).
1864. April. ‘Complaints are occasionally made in different districts of the scarcity of hands, but this deficiency is chiefly felt in particular departments, as, for instance, of weavers… These complaints have their origin as much from the low rate of wages which the hands can earn owing to the inferior qualities of yarn used, as from any positive scarcity of workpeople even in that particular department. Numerous differences have taken place during the past month between the masters of particular mills and their operatives in respect to the wages. Strikes, I am sorry to say, are but too frequently resorted to… the effect of the Public Works Act is felt as a competition by the mill-owners. The local committee at Bacup has suspended operations, for although all the mills are not running, yet a scarcity of hands has been experienced’ (Reports of the Inspectors of Factories… 30 April 1864, PP. 9, 10).
Indeed, the factory-owners’ idyll was now over. As a result of the Public Works Act, the demand for labour grew so steeply that many factory workers were now earning 4 to 5 shillings a day in the Bacup quarries. The public works were therefore gradually closed down – this new edition of the Ateliers nationaux of 1848, but this time set up for the advantage of the bourgeoisie.*
Experiments ‘in corpore vili’†
‘Although I have given the actual earnings of the operatives’ (fully employed) ‘in several mills, it does not follow that they earn the same amount week by week. The operatives are subject to great fluctuation, from the constant experimentalizing of the manufacturers upon different kinds and proportions of cotton and waste in the same mill, the “mixings” as it is called being frequently changed; and the earnings of the operatives rise and fall with the quality of the cotton mixings; sometimes they have been within 15 per cent of former earnings, and then in a week or two, they have fallen from 50 to 60 per cent.’
Inspector Redgrave, who is talking here, goes on to give details of wages taken from practical experience; the following will serve here as example.
A, weaver, family of six, employed for four days a week, 6s. 8 1/2d.; B, twister, four and a half days a week, 6s.; C, weaver, family of four, five days a week, 5s. Id.; D, slubber, family of six, four days a week, 7s. l0d.; E, weaver, family of seven, three days, 5s., and so on. Redgrave continues: ‘The above returns are deserving of consideration, for they show that work would become a misfortune in many a family, as it not merely reduces the income, but brings it so low as to be utterly insufficient to provide more than a small portion of the absolute wants, were it not that supplemental relief is granted to operatives when the wages of the family do not reach the sum that would be given to them as relief, if they were all unemployed’ (Reports of the Inspectors of Factories…31 October 1863, pp. 50–53).
‘In no week since the 5th of June last was there more than two days seven hours and a few minutes employment for all the workers’ (ibid., p. 121).
From the time the crisis began, up until 25 March 1863, almost £3 million was dispensed by the Poor Law authorities, the Central Relief Committee and the Mansion House Committee in London (p. 13).
‘In a district in which the finest yarn is spun… the spinners suffer an indirect reduction of 15 per cent in consequence of the change from South Sea Island to Egyptian cotton… In an extensive district, in many parts of which waste is largely used as a mixture with Surat… the spinners have had a reduction of 5 per cent, and have lost from 20 to 30 per cent in addition, through working Surat and waste. The weavers are reduced from 4 looms to 2 looms. In 1860, they averaged 5s. 7d. per loom, in 1863, only 3s. 4d. The fines, which formerly varied from 3d. to 6d.’ (for the spinner) ‘on American, now run up to from 1s. to 3s. 6d.’
In one district where Egyptian cotton was used, mixed with East Indian: ‘the average of the mule spinners, which was in 1860 18s. to 25s., now averages from 10s. to 18s. per week, caused, in addition to inferior cotton, by the reduction of the speed of the mule to put an extra amount of twist in the yarn, which in ordinary times would be paid for according to list’ (pp. 43, 44). ‘Although the Indian cotton may have been worked to profit by the manufacturer, it will be seen’ (see the wage list on p. 53) ‘that the operatives are sufferers compared with 1861, and if the use of Surat be confirmed, the operatives will want to earn the wages of 1861, which would seriously affect the profits of the manufacturer, unless he obtain compensation either in the price of the raw cotton or of his products’ (p. 105).
Rent of Houses. ‘The rent is frequently deducted from the wages of operatives, even when working short time, by the manufacturers whose cottages they may be occupying. Nevertheless the value of this class of property has diminished, and houses may be obtained at a reduction of from 25 to 50 per cent upon the rent of the houses in ordinary times; for instance, a cottage which would have cost 3s. 6d. per week can now be had for 2s. 4d. per week, and sometimes even for less’ (p. 57).
Emigration. The factory-owners were of course against workers emigrating, firstly because, ‘looking forward to the recovery of the cotton trade from its present depression, they keep within their reach the means whereby their mills can be worked in the most advantageous manner’. On the other hand, ‘many manufacturers are owners of the houses in which operatives employed in their mills reside, and some unquestionably expect to obtain a portion of the back rent owing’ (p. 96).
Mr Bernal Osborne said in a speech to his parliamentary electors on 22 October 1864 that the workers of Lancashire had behaved like the ancient philosophers (Stoics). Not like sheep?