III. The Cotton Manufacture

We turn now to the history of some of the industries to which protection was applied during this long period, in order to determine, so far as this is possible, how far their introduction and early growth were promoted or rendered possible by protection. We shall try to see how far and with what success protection to young industries was applied. The most important of them, on account both of its magnitude and of the peculiarly direct application of protection to it, is the cotton manufacture; and we are fortunate in having, at the same time, the fullest and most trustworthy accounts of the early history of this industry.¹²

During the first of the two periods into which we have divided the early economic history of the United States, several attempts were made to introduce the manufacture of cotton by the machinery invented by Hargreaves and Arkwright in the latter part of the 18th century. One or two of these attempts succeeded, but most of them failed, and the manufacture, which then was growing with marvelous rapidity in England, failed to attain any considerable development in this country. In 1787 a factory using the new machinery was established at Beverly, Mass., and obtained aid from the State treasury; but it was soon abandoned. Similar unsuccessful ventures were made at Bridgewater, Mass., Norwich, Conn., and Pawtucket, R. I., as well as in Philadelphia. The spinning-jenny was introduced in all these, but never successfully operated.¹³ The first successful attempt to manufacture with the new machinery was made by Samuel Slater, at Pawtucket, R. I. Slater was a workman who had been employed in Arkwright’s factories in England. He joined to mechanical skill strong business capacity. He had become familiar with the system of carding, drawing, roving, and mulespinning. Induced to come to the United States in 1798 by prizes offered by the Philadelphia Society for Promoting Manufactures, he took charge in the following year of a cotton-factory which had been begun and carried on with little success by some Quakers of Pawtucket. He was successful in setting up the Arkwright machinery, and became the founder of the cotton manufacture in this country. Through him machinery, and instruction in using it, were obtainable; and a few other factories were begun under his superintendence. Nevertheless, the manufacture hardly maintained its hold. In 1803 there were only four factories in the country.¹⁴ The cotton manufacture was at that time extending in England at a rapid rate, and the imports of cotton goods from England were large. The Treasury reports of those days give no separate statements of the imports of cotton goods; but in 1807 it was estimated that the imports of cotton goods from England amounted to eleven million dollars’ worth—a very large sum for those days.¹⁵ The consumption of cotton goods was large; but only an insignificant part of it was supplied by home production, although later developments showed that this branch of industry could be carried on with distinct success. The ease with which these imports were paid for, and the stimulus which this period, as described in the preceding pages, gave to agriculture and commerce, account in part for the slowness with which the domestic manufacture developed. The fact that raw cotton was not yet grown to any considerable extent in the country, together, doubtless, with the better machinery and larger experience and skill of the English, account for the rest.

When, however, the period of restriction began, in 1808, the importation of foreign goods was first impeded, and soon entirely prevented. The domestic manufacture accordingly extended with prodigious rapidity. Already during the years 1804–8 greater activity must have prevailed; for in the latter year fifteen mills had been built, running 8,000 spindles. In 1809 the number of mills built shot up to 62, with 31,000 spindles, while 25 more mills were in course of erection.¹⁶ In 1812 there were 50 factories within thirty miles of Providence, operating nearly 60,000 spindles, and capable of operating 100,000.¹⁷ During the war the same rapid growth continued, rendered possible as it was by the increasing supply of raw cotton from the South. The number of spindles was said to be 80,000 in 1811, and 500,000 in 1815. In 1800, 500 bales of cotton had been used; in 1805, 1,000 bales. In 1810 the number consumed rose to 10,000; in 1815, it was 90,000.¹⁸ These figures cannot be supposed to be at all accurate; but they indicate clearly an enormously rapid development of the manufacture of cotton.

The machinery in almost all these new factories was for spinning yarn only. Weaving was still carried on by the hand-loom, usually by weavers working in considerable numbers on account for manufacturers. Toward the end of the war, however, a change began to be made almost as important in the history of textile manufactures as the use of the spinningjenny and mule: namely, the substitution of the power-loom for the hand-loom. The introduction of the power-loom took place in England at about the same time, and some intimation of its use seems to have reached the inventor in this country, Francis C. Lowell. He perfected the machine, however, without any use of English models, in the course of the year 1814. In the same year it was put in operation at a factory at Waltham, Mass. There for the first time the entire process of converting cotton into cloth took place under one roof. The last important step in giving textile manufactures their present form was thus taken.¹⁹

When peace was made in 1815, and imports began again, the newly established factories, most of which were badly equipped and loosely managed, met with serious embarrassment. Many were entirely abandoned. The manufacturers petitioned Congress for assistance; and they received, in 1816, that measure of help which the public was then disposed to grant. The tariff of 1816 levied a duty of 25 per cent. on cotton goods for three years, a duty considered sufficiently protective in those days of inexperience in protective legislation. At the same time it was provided that all cotton cloths, costing less than 25 cents a yard, should be considered to have cost 25 cents and be charged with duty accordingly; that is, should be charged 25 per cent. of 25 cents, or 6¼ cents a yard, whatever their real value or cost. This was the first of the minimum valuation provisos which played so considerable a part in later tariff legislation, and which have been maintained in large part to the present time. A similar minimum duty was imposed on cotton-yarns.²⁰ At the time when these measures were passed, the minimum provisos hardly served to increase appreciably the weight of the duty of 25 per cent. Coarse cotton cloths were then worth from 25 to 30 cents, and, even without the provisos, would have paid little, if anything, less than the minimum duty. But, after 1818, the use of the power-loom, and the fall in the price of raw cotton, combined greatly to reduce the prices of cotton goods. The price of coarse cottons fell to 19 cents in 1819, 13 cents in 1826, and 8½ cents in 1829.²¹ The minimum duty became proportionately heavier as the price decreased, and, in a few years after its enactment, had become prohibitive of the importation of the coarser kinds of cotton cloths.

During the years immediately after the war, the aid given in the tariff of 1816 was not sufficient to prevent severe depression in the cotton manufacture. Reference has already been made to the disadvantages which, under the circumstances of the years 1815–18, existed for all manufacturers who had to meet competition from abroad. But when the crisis of 1818–19 had brought about a rearrangement of prices more advantageous for manufacturers, matters began to mend. The minimum duty became more effective in handicapping foreign competitors. At the same time the power-loom was generally introduced. Looms made after an English model were introduced in the factories of Rhode Island, the first going into operation in 1817; while in Massachusetts and New Hampshire the loom invented by Lowell was generally adopted after 1816.²² From these various causes the manufacture soon became profitable. There is abundant evidence to show that shortly after the crisis the cotton manufacture had fully recovered from the depression that followed the war.²³ The profits made were such as to cause a rapid extension of the industry. The beginning of those manufacturing villages which now form the characteristic economic feature of New England falls in this period. Nashua was founded in 1823. Fall River, which had grown into some importance during the war of 1814, grew rapidly from 1820 to 1830.²⁴ By far the most important and the best known of the new ventures in cotton manufacturing was the foundation of the town of Lowell, which was undertaken by the same persons who had been engaged in the establishment of the first power-loom factory at Waltham. The new town was named after the inventor of the power-loom. The scheme of utilizing the falls of the Merrimac, at the point where Lowell now stands, had been suggested as early as 1821, and in the following year the Merrimac Manufacturing Company was incorporated. In 1823 manufacturing began, and was profitable from the beginning; and in 1824 the future growth of Lowell was clearly foreseen.²⁵

From this sketch of the early history of the cotton manufacture we may draw some conclusions. Before 1808 the difficulties in the way of the introduction of this branch of industry were such that it made little progress. These difficulties were largely artificial; and though the obstacles arising from ignorance of the new processes and from the absence of experienced workmen, were partly removed by the appearance of Slater, they were sufficient, when combined with the stimulus which the condition of foreign trade gave to agriculture and the carrying trade, to prevent any appreciable development. Had this period come to an end without any accompanying political change—had there been no embargo, no non-intercourse act, and no war with England—the growth of the cotton manufacture, however certain to have taken place in the end, might have been subject to much friction and loss. Conjecture as to what might have been is dangerous, especially in economic history, but it seems reasonable to suppose that if the period before 1808 had come to an end without a jar, the eager competition of well-established English manufacturers, the lack of familiarity with the processes, and the long-continued habit, especially in New England, of almost exclusive attention to agriculture, commerce, and the carrying trade, might have rendered slow and difficult the change, however inevitable it may have been, to greater attention to manufactures. Under such circumstances there might have been room for the legitimate application of protection to the cotton manufacture as a young industry. But this period, in fact, came to an end with a violent shock, which threw industry out of its accustomed grooves, and caused the striking growth of the cotton manufacture from 1808 to 1813. The transition caused much suffering, but it took place sharply and quickly. The interruption of trade was equivalent to a rude but vigorous application of protection, which did its work thoroughly. When peace came, in 1815, it found a large number of persons and a great amount of capital engaged in the cotton manufacture, and the new processes of manufacture introduced on an extensive scale. Under such circumstances the industry was certain to be maintained if it was for the economic interest of the country that it should be carried on.

The duties of the tariff of 1816, therefore, can hardly be said to have been necessary. Nevertheless, they may have been of service. The assistance they gave was, it is true, insignificant in comparison with the shelter from all foreign competition during the war. Indeed, most manufacturers desired much higher duties than were granted.²⁶ It is true, also, that the minimum duty on cottons was least effective during the years immediately after the war, when the price of cottons was higher, and the duty was therefore proportionately less high. But these years between the close of the war and the general fall of prices in 1819 were trying for the manufacturers. The normal economic state, more favorable for them, was not reached till the crisis of 1818–19 was well over. During the intervening years the minimum duty may have assisted the manufacturers without causing any permanent charge on the people. The fact that careful and self-reliant men like the founders of the Waltham and Lowell enterprises, were most urgent in advising the adoption of the rates of 1816—at a time, too, when the practice of appealing to Congress for assistance when in distress had not yet become common among manufacturers—may indicate that those rates were of service in encouraging the continuance of the manufacture. How seriously its progress would have been impeded or retarded by the absence of duties, cannot be said. On the whole, although the great impulse to the industry was given during the war, the duties on cottons in the tariff of 1816 may be considered a judicious application of the principle of protection to young industries.

Before 1824, the manufacture, as we have seen, was securely established. The further application of protection in that and in the following years was needless, and, so far as it had any effect, was harmful. The minimum valuation was raised in 1824 to 30 cents, and in 1828 to 35 cents. The minimum duties were thereby raised to 7½ and 8¾ cents respectively. By 1824 the manufacture had so firm a hold that its further extension should have been left to individual enterprise, which by that time might have been relied on to carry the industry as far as it was for the economic interest of the country that it should be carried. The increased duties of 1824 and 1828 do not come within the scope of the present discussion.