The outbreak of the American Civil War, the Confederate embargo of cotton exports, and Union blockade of cotton ports led to short-time working and significant distress in the cotton districts of Lancashire. It was a pivotal moment in the history of the global textile trade. Surprisingly, the topic has attracted little attention and been the subject of even less debate. Jim Powell has written a highly readable and sometimes polemical account that addresses this gap. In doing so, he takes a wide-ranging perspective that goes beyond the crisis of the war years to investigate the structure of the global textile trade, the strategy of industry leaders, and the relationship between capitalism and slavery. The juxtaposition of local and international events means the book will appeal to historians of Liverpool and the global textile trade alike. The focus naturally is on transatlantic trade, the American South, and cotton as an export crop. Along with historians of agriculture, commodities, and trade, students of industrial northern England will gain valuable, new perspectives.Powell's perspective is international, giving due recognition to recent interpretations of the evolution of the global cotton market by Sven Beckert, Giorgio Riello, and Prasannan Parthasarathi. Chapter 1 reviews their arguments and surveys the evolution of the cotton trade to the eve of the Civil War, including the prewar boom that flooded Lancashire's markets, and profiles those who stood to gain or lose from a sudden interruption in cotton supplies.Managing and responding to uncertainty was certainly a perennial issue for the Lancashire textile industry, and even before the war, its leaders sought to reduce dependence on American cotton. Their strategies secured neither a united response nor government intervention, notwithstanding the claims of Beckert's Empire of Cotton (2015), which Powell's evidence strongly contests. As he explains in chapter 2, the search for alternative sources was unrealistic. Their relative unattractiveness confirmed Lancashire's dependency on American cotton for reasons of quality and price, despite being vulnerable to interruption in supply. That in turn left Lancashire susceptible to speculation, which amounted to betting on how long the war would last. As chapter 3 shows, following an initial period of complacency, there was a middle period of endemic speculation before a collapse in prices in September 1864.There is a consensus among textile historians that reduced production during the war was the consequence not of reduced supply but of overproduction in the three years prior. Chapter 4 questions this view, arguing that rising raw cotton prices caused by the shortages made new production unattractive when markets were already well stocked with cheaper intermediate and final products. As a result, the Lancashire cotton industry emerged from the war significantly smaller than it might have been, effectively losing the equivalent of four years' average growth. Chapter 5 questions the assumption that Liverpool was sympathetic to the Confederacy, showing that sympathies were split according to business interests. If anything, financial and commercial players had stronger ties with the Union. In another significant divide, most merchants wished for a swift end to the war, whereas speculators wished for its prolongation. The length of the war exceeded expectations, and speculators profited accordingly. Liverpool brokers, notionally the agents of the spinners, enriched themselves, as explained in chapter 6, by trading on their own account and in both buy- and sell-side transactions, thereby profiting at the expense of Manchester and the rest of Lancashire. Selling brokers and banks profited exceptionally from the speculation. Sell-side profits drew brokers into increasingly exposed positions, reliant on short-term bank finance, which, as chapter 7 illustrates, led to several bankruptcies once prices began to fall.Price was a crucial determinant of cotton-trade dynamics and structure, a factor neglected in prior interpretations. It explains why American, as opposed to Indian, cotton remained the dominant supply source before and after the war. Following the end of slavery, the cotton supply continued as before and at lower prices. The concluding chapter shows how technical and institutional changes, independent of the war and its effects, transformed Liverpool. The transatlantic cable, the creation of a clearinghouse, and the establishment of a futures market were Liverpool's 1860s equivalent of London's Big Bang of the 1980s. The changes were intended to control speculation. Whether they succeeded is not examined here, nor are the subsequent market corner operations that posed new threats to Liverpool's reputation and price stability in the manufacturing hinterland. These events are beyond the reasonable scope of a book that offers an accessible and insightful account of the impact and changes wrought by the crisis of the early 1860s and makes a significant contribution to the wider history of cotton.
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Oct 19, 2022
Xiaorui Hu + 2
Open Access