As before, we assume that no change takes place in the rate of surplus-value. This assumption is needed to study the case in its pure form. It would still be possible, with the rate of surplus-value unchanged, for a capital to employ a growing or shrinking number of workers, because the price swings in raw material we are about to look at could contract or expand that capital. In that case the mass of surplus-value could vary while its rate stayed constant. But this too has to be set aside here as a mere incident.

Where an improvement in machinery and a change in the price of raw material act at the same time, whether on how many workers a given capital employs or on the level of wages, one need only put together: (1) the effect the variation in constant capital produces on the rate of profit, (2) the effect the variation in wages produces on the rate of profit; the net result then follows by itself.

There is a general point to note here too, as in the earlier case: whenever variations occur, whether from economizing on constant capital or from price swings in raw material, they always affect the rate of profit, even when they leave wages completely untouched, and so leave the rate and mass of surplus-value completely untouched too. They change the magnitude of C in s' v/C — the whole capital advanced, the sum the surplus-value is measured against — and thereby the value of the whole fraction.

So here too it makes no difference at all — unlike what showed up when we were looking at surplus-value — in which spheres of production these variations occur: whether the industries they touch produce means of subsistence for the workers, or produce constant capital for producing such means of subsistence, or not. What has been developed here holds equally where the variations occur in luxury production, and by luxury product is meant here all production that is not required for the reproduction of labour-power.

Under raw material we also include here the ancillary materials, such as indigo, coal, gas, and so on. Further, so far as machinery falls under this heading, its own raw material consists of iron, wood, leather, and so on. Its own price is therefore affected by price swings in the raw material that goes into its construction. So far as its price is raised by price swings, whether in the raw material it is made of or in the ancillary material its running consumes, the rate of profit falls to just that extent. And the other way round: if those price swings lower its price instead, the rate of profit rises to just that extent.

In what follows we will keep to price swings in the raw material that goes into producing the commodity itself, leaving aside the raw material machinery is made of and the ancillary materials its running consumes.

Only this needs noting here: the natural riches in iron, coal, wood and so on, the main elements in constructing and running machinery, appear here as a natural fruit borne by capital, and form an element in determining the rate of profit, independent of whether wages are high or low.

Since the rate of profit is s/C — the surplus-value measured against the whole capital advanced — or equivalently s/(c + v), it is clear that anything causing a change in the size of c, and hence of C, likewise produces a change in the rate of profit, even if s and v, and their ratio to each other, remain unchanged. But raw material forms a major part of constant capital. Even in branches of industry where no actual raw material enters, it enters as an ancillary material or as a component of the machine, and so its price swings affect the rate of profit to just that extent.

If the price of raw material falls by an amount d, then s/C or s/(c + v) turns into s/(C - d) or s/((c - d) + v). The rate of profit therefore rises. The other way round: if the price of raw material rises, then s/C or s/(c + v) becomes s/(C + d) or s/((c + d) + v); the rate of profit therefore falls. So, other things being equal, the rate of profit falls and rises in the opposite direction to the price of raw material.

One consequence of this, among others, is how important a low price of raw material is for industrial countries, even if the swings in that price were not accompanied at all by changes on the selling side of the product — that is, quite apart from the relation of supply and demand. It follows further that foreign trade affects the rate of profit even apart from any effect it has on wages through cheapening the necessary means of subsistence. For it affects the prices of the raw or ancillary materials that go into industry or agriculture.

Both mistakes come of one thing: how the rate of profit differs from the rate of surplus-value has never been properly grasped. So economists who stress the great influence of raw-material prices on the rate of profit — an influence established by practical experience — explain it in a theoretically quite mistaken way (Torrens); while economists who hold fast to general principles, like Ricardo, fail to recognize what world trade does to the rate of profit.

This is why abolishing or lowering duties on raw materials matters so much to industry; letting them in as freely as possible was already a central teaching of the more rationally developed protective-tariff system. Alongside the abolition of the corn duties, letting raw materials in freely was the chief concern of the English free-traders, who took particular care that the duty on cotton was abolished too.

Flour in the cotton industry shows how much it matters to lower the price not of a raw material proper but of an ancillary material — one that is, admittedly, also a staple food. As early as 1837 R. H. Greg calculated that the 100,000 power looms and 250,000 hand looms then at work in British cotton-weaving used up 41 million pounds of flour a year for smoothing the warp. On top of that came another third of this quantity for bleaching and other processes.

He put the total value of the flour used this way at £342,000 a year for the previous ten years. Comparing this with flour prices on the Continent showed that the price mark-up the corn duties forced on the factory-owners, for flour alone, had come to £170,000 a year. For 1837 Greg estimates it at £200,000 at least, and mentions one firm for which the mark-up on flour came to £1,000 a year. This is what followed from it:

"large manufacturers, careful and calculating men of business, have said that ten hours' work a day would be quite enough, if the corn duties were abolished." (Factory Report, October 1848, p. 98.)

The corn duties were abolished; so was the duty on cotton and other raw materials. But hardly was this achieved when the factory-owners' opposition to the Ten Hours Bill grew fiercer than ever. And when ten-hour factory labour nonetheless became law immediately afterwards, the first result was an attempt at a general cutting of wages.

The value of raw and ancillary materials passes wholly and at once into the value of the product they are used to make, while the value of the elements of fixed capital enters the product only in proportion to its depreciation, that is, only gradually. It follows that the price of the product is affected to a much higher degree by the price of the raw material than by that of the fixed capital, although the rate of profit is determined by the total value of the capital applied, regardless of how much of it has been used up or not.

We are still assuming here that commodities are sold at their values, so the price swings brought about by competition are not yet any concern of ours. Mentioned only in passing, then: it is clear that the expansion or contraction of the market depends on the price of the individual commodity, and stands in inverse relation to that price's rise or fall. In reality, accordingly, it is also found that as the price of the raw material rises the price of the manufactured article does not rise in the same proportion, and as the price of the raw material falls the price of the article does not fall in the same proportion. Hence in the one case the rate of profit falls lower, and in the other rises higher, than it would if the commodities were sold at their values.

Further: the size and value of the machinery applied grow as the productivity of labour develops, but not in the same proportion as that productivity grows, that is, not in the same proportion as this machinery yields an increased product.

So in branches of industry where raw material enters at all, that is, where the object of labour is itself already the product of earlier labour, the growing productivity of labour expresses itself precisely in the proportion in which a larger quantity of raw material absorbs a given quantity of labour — in other words, in the growing mass of raw material that is, for instance, turned into product, worked up into a commodity, in one hour of labour.

So in proportion as the productivity of labour develops, the value of the raw material forms an ever-growing component of the value of the commodity product — not only because it enters wholly into it, but because in every aliquot part — every equal share — of the total product, both the part formed by the depreciation of the machinery and the part formed by newly added labour keep constantly shrinking. As a result of this downward movement, the other portion of value, the one formed by the raw material, grows proportionally — unless this growth is cancelled out by a corresponding fall in the value of the raw material itself, arising from the growing productivity of the labour applied to producing it.

Further: raw and ancillary materials, just like wages, form components of circulating capital, and so must constantly be replaced in full out of each sale of the product, while of the machinery only the depreciation has to be replaced, and that initially in the form of a reserve fund. Whether every single sale contributes its share to that reserve fund in fact matters not at all, provided only that the whole year's sales deliver their yearly share to it. So here again we see how a rise in the price of raw material can cut down or check the whole reproduction process: either the price realised from the sale of the commodity does not suffice to replace all the elements of the commodity, or it makes it impossible to carry the process on at a scale matching its technical basis, so that either only part of the machinery can be kept at work, or the machinery as a whole cannot work the full customary time.

Finally, the costs caused by waste vary in direct proportion to the price swings of the raw material, rising when it rises and falling when it falls. But here too there is a limit. In 1850 the report still ran:

"A source of considerable loss from the rise in the price of raw material would hardly strike anyone who is not a practical spinner, namely the loss through waste. I am told that when cotton rises, the costs to the spinner, especially for the lower qualities, grow in a higher proportion than the price mark-up paid would suggest. The waste in spinning coarse yarns comes to a good 15 per cent; so if this rate causes a loss of ½d. per pound at a cotton price of 3½d., it raises the loss per pound to 1d. as soon as cotton rises to 7d. per pound." (Factory Report, April 1850, p. 17.)

But when, as a result of the American Civil War, cotton rose to prices unheard of for almost a hundred years, the report read quite differently:

"The price now given for cotton waste, and the reintroduction of the waste into the mill as raw material, offer some compensation for the difference, in loss through waste, between Surat and American cotton. This difference comes to about 12½ per cent. The loss in working Surat cotton is 25 per cent, so that the cotton actually costs the spinner a quarter more than he pays for it. The loss through waste was not so important when American cotton stood at 5 or 6d. per pound, for it did not exceed ¾d. per pound; but it is very important now, when the pound of cotton costs 2s. and the loss through waste therefore comes to 6d." (Factory Report, October 1863, p. 106.)

The things we look at in this chapter only reach their full development where there is a credit system and competition on the world market — and the world market is generally what the capitalist mode of production rests on and lives in. But these more concrete forms of capitalist production can only be set out fully once the general nature of capital has been grasped, and setting them out falls outside the plan of this work; it belongs to whatever continues it.

Even so, the phenomena named in the heading can be dealt with here in general terms. They hang together — first with each other, and second with both the rate and the mass of profit. They are also worth setting out briefly for another reason: they produce the appearance that not only the rate but also the mass of profit — which is in fact identical with the mass of surplus-value — can rise and fall independently of any movement in surplus-value, whether in its mass or its rate.

Are release and tying-up of capital, on the one side, and rise and fall in the value of capital, on the other, to be regarded as different phenomena?

The first question is: what do we mean by release and tying-up of capital? Revaluation and devaluation explain themselves. They mean only that capital already there rises or falls in value because of some general economic circumstance — this is not about the particular fortunes of any one private capital — that is, the value of the capital advanced to production rises or falls, quite apart from the valorization it gets from the surplus labour it employs.

By tying-up of capital we mean that a certain given proportion of the product's total value has to be turned back afresh into the elements of constant or variable capital, if production is to go on at its old scale. By release of capital we mean that a part of the product's total value, which previously had to be turned back into constant or variable capital, becomes available and superfluous, if production is to continue within the bounds of the old scale.

This release or tying-up of capital is different from release or tying-up of revenue. Say the annual surplus-value for a capital C is = x. If commodities that go into the capitalists' own consumption become cheaper, then x - a can be enough to provide the same amount of enjoyment as before. So a part of the revenue, = a, is released, and this can now serve either to enlarge consumption or to be turned back into capital, that is, accumulated. The other way round: if x + a is now needed to keep up the same way of living, then either that way of living has to be cut back, or a part of the income, = a, that used to be accumulated, now has to be spent as revenue instead.

The revaluation and devaluation can affect either constant or variable capital, or both, and with constant capital it can again relate to the fixed or the circulating portion, or to both.

With constant capital, what has to be considered is: raw and ancillary materials, which also take in semi-finished products — here we group all of these under the name raw materials — and machinery and other fixed capital.

Above, we looked in particular at variation in the price, or value, of raw material, with respect to its effect on the rate of profit, and set up the general law that, other things being equal, the rate of profit stands in inverse relation to the value of the raw material. And this holds unconditionally for capital that is newly engaged in a business — that is, where the investment of capital, the conversion of money into productive capital, is only now taking place.

But apart from this capital that is only now being invested, a large part of capital already at work sits in the sphere of circulation, while another part sits in the sphere of production. One part is present as commodities on the market and is to be turned into money; another part is present as money, in whatever form, and is to be turned back into the conditions of production; a third part sits inside the sphere of production itself, partly in the original form of means of production — raw material, ancillary material, semi-finished products bought on the market, machinery and other fixed capital — and partly as product still in the making.

How revaluation or devaluation acts here depends a great deal on the proportion in which these parts stand to one another. To simplify the question, let us for now leave all fixed capital entirely out of play, and consider only the part of constant capital made up of raw materials, ancillary materials, semi-finished products, commodities still in the making, and finished commodities sitting on the market.

If the price of the raw material rises — cotton, say — then the price of cotton goods rises too: the semi-finished products, like yarn, and the finished commodities, like cloth, that were made with cheaper cotton. In the same way, the value rises of cotton not yet worked up, sitting in stock, and of cotton still being worked up. This cotton still in process, because it now becomes, in retrospect, the expression of more labour-time, hands on to the product it enters as an ingredient a higher value than it itself originally had, and higher than the capitalist paid for it.

So if a rise in the price of the raw material is accompanied by a large mass of finished commodities already on the market, at whatever stage of completion, then the value of these commodities rises, and with it there is a rise in the value of the capital already held. The same holds for the stocks of raw material sitting in the producers' hands. This revaluation can compensate the individual capitalist, or even a whole particular sphere of production of capital, for the fall in the rate of profit that follows from the rise in the price of raw material — or it can more than compensate it.

Without going here into the details of how competition works this out, it can nonetheless be remarked, for completeness: (1) if the stocks of raw material sitting in store are considerable, they work against the rise in price that originated at the raw material's own point of production; (2) if the semi-finished products or finished commodities sitting on the market weigh very heavily on it, they stop the price of the finished commodities and the semi-finished product from growing in proportion to the price of their raw material.

It goes the other way round when the price of the raw material falls, which, other things being equal, raises the rate of profit. The commodities sitting on the market, the articles still in the making, the stocks of raw material, are devalued, and this works against the simultaneous rise in the rate of profit.

The smaller the stocks sitting in the sphere of production and on the market at the end of the business year — that is, at the time when the raw material is newly delivered in bulk, as with agricultural products after the harvest — the more purely the effect of a price change in the raw material comes out.

Our whole investigation so far starts from the assumption that a rise or fall in prices expresses real fluctuations in value. But since what is at stake here is the effect these price fluctuations have on the rate of profit, it makes no difference at all what lies behind them; so what has been developed here holds equally when prices rise and fall not because of fluctuations in value but because of the workings of the credit system, of competition, and so on.

The rate of profit is the excess of the product's value over the capital advanced, measured against that whole capital advanced. So a rise in the rate of profit that came from a devaluation of the capital advanced would be bound up with a loss of capital value — and, just as much, a fall in the rate of profit that came from a revaluation of it might well be bound up with a gain.

As for the other part of constant capital — machinery and fixed capital generally — the revaluations that occur here, which relate in particular to buildings, to land, and so on, cannot be set out without the theory of ground-rent, and so do not belong here. But for devaluation, the following is of general importance:

1. The constant improvements which rob existing machinery, factory equipment, and so on, of part of their use-value relative to what is now being built, and hence of part of their value too. This process bites hardest, in particular, in the first period after machinery is newly introduced, before it has reached a certain degree of maturity, and where it is therefore constantly made obsolete before it has had time to reproduce its value. This is one of the reasons for the boundless lengthening of the working day usual in such periods, and for working with alternating day and night shifts, so that in a shorter span of time — without reckoning the wear and tear of the machinery too high — its value is reproduced. If, on the other hand, the short period during which the machinery is effective (its short lifespan measured against improvements to be expected) is not compensated for in this way, then it gives off too large a portion of its value to the product on account of moral depreciation, so that it cannot even compete with hand labour.

Once machinery, factory buildings, fixed capital generally, has reached a certain maturity, so that for a longer time it stays unchanged at least in its basic construction, a similar devaluation sets in — this time from improvements in the methods of reproducing this fixed capital. The value of the machinery and so on now falls, not because it is quickly displaced, or devalued to some degree, by newer, more productive machinery, but because it can now be reproduced more cheaply. This is one of the reasons why large business establishments often only flourish under a second owner, once the first owner has gone bankrupt and the second, who bought them cheap, therefore starts production from the outset with a smaller outlay of capital.

In agriculture especially it is plainest of all that the very same causes that raise or lower the price of the product also raise or lower the value of the capital, because that capital itself consists, for the most part, of that very product — corn, cattle, and so on. (Ricardo.)

Variable capital still has to be dealt with.

To the extent that the value of labour-power rises because the value of the means of subsistence needed to reproduce it rises, or conversely falls because the value of these means of subsistence falls — and revaluation and devaluation of variable capital express nothing further than these two cases — then, the working day staying the same length, a rise in the value of labour-power means less surplus-value and a fall in it means more. But other circumstances can be bound up with this at the same time — release and tying-up of capital — which have not been examined before and are now to be set out briefly.

If wages fall because of a fall in the value of labour-power — and this can even go together with a rise in the real price of labour — then a part of the capital that had until now been laid out in wages is released. There is a release of variable capital. For capital about to be newly invested, the only effect of this is that it works with a higher rate of surplus-value: the same quantity of labour is set in motion with less money than before, so the unpaid part of the labour grows at the expense of the paid part.

But for capital already at work, not only does the rate of surplus-value rise — a part of the capital previously laid out in wages is also set free. Until now this part was tied up: it formed a standing portion, taken out of the proceeds of the product, that had to be laid out in wages, had to function as variable capital, if the business was to go on at the old scale. Now this part becomes available and can be used as a new investment of capital — whether to expand the same business, or to function in another sphere of production.

Let us assume, for example, that £500 was originally needed to set 500 workers in motion each week, and that now only £400 is needed for it. Then, if the mass of value produced was £1,000 both times, the mass of the weekly surplus-value was, the first time, £500, and the rate of surplus-value 500/500 = 100 per cent. But after the fall in wages the mass of surplus-value becomes £1,000 - £400 = £600, and its rate 600/400 = 150 per cent.

And this rise in the rate of surplus-value is the only effect for someone who sets up a new business in the same sphere of production with a variable capital of £400 and a corresponding constant capital. But in a business already at work, in this case it is not only that, because of the devaluation of the variable capital, the mass of surplus-value has risen from £500 to £600 and the rate of surplus-value from 100 to 150 per cent; in addition, £100 of the variable capital has been released, and this can be used to exploit labour once again. So the same quantity of labour is not only exploited more advantageously — the release of the £100 also means that, with the same variable capital of £500, more workers than before can be exploited at the increased rate.

Now the other way round. Suppose the original division of the product, with 500 workers employed, was 400v + 600s = 1,000, so that the rate of surplus-value = 150 per cent. Here the worker gets £⅘ = 16 shillings a week. If, because of a revaluation of the variable capital, 500 workers now cost £500 a week, the weekly wage of each becomes £1, and £400 can now only set 400 workers in motion. So if the same number of workers as before are to be set in motion, we have 500v + 500s = 1,000; the rate of surplus-value would have fallen from 150 to 100 per cent, that is, by a third. For capital about to be newly invested, this would be the only effect — that the rate of surplus-value is lower. Other things being equal, the rate of profit would have fallen correspondingly, though not in the same proportion. If, for example, c = 2,000, we have in the one case 2,000c + 400v + 600s = 3,000, with s' = 150 per cent and p' = 600/2,400 = 25 per cent. In the second case, 2,000c + 500v + 500s = 3,000, with s' = 100 per cent and p' = 500/2,500 = 20 per cent.

For the capital already engaged, on the other hand, the effect would be twofold. With £400 of variable capital, only 400 workers can now be employed, and at a rate of surplus-value of 100 per cent; so they yield a total surplus-value of only £400. Further, since a constant capital worth £2,000 needs 500 workers to set it in motion, 400 workers only set in motion a constant capital worth £1,600. So if production is to be carried on at the previous scale, and a fifth of the machinery is not to stand idle, the variable capital must be increased by £100, in order to go on employing 500 workers as before; and this is possible only by tying up capital that was previously available — either by taking a part of the accumulation that was meant to serve expansion and using it now merely to fill the gap, or by adding to the old capital a part that was earmarked to be spent as revenue. With this outlay on variable capital increased by £100, £100 less surplus-value is then produced. To set the same number of workers in motion, more capital is needed, and at the same time the surplus-value that each individual worker yields is reduced.

The advantages that come from the release of variable capital, and the disadvantages that come from its being tied up, both exist only for capital that is already engaged and therefore reproduces itself under given conditions. For capital about to be newly invested, the advantage on the one side, and the disadvantage on the other, are confined to a rise or a fall in the rate of surplus-value, and a corresponding — though by no means proportional — change in the rate of profit.

The release and tying-up of variable capital just examined is the consequence of devaluation and revaluation of the elements of variable capital, that is, of the reproduction costs of labour-power. But variable capital could also be released if, as a result of a development in the productive power of labour, with the rate of wages staying the same, fewer workers were needed to set the same mass of constant capital in motion. In the same way, conversely, a tying-up of additional variable capital can take place if, as a result of a decrease in the productive power of labour, more workers are needed for the same mass of constant capital.

If, on the other hand, a part of the capital formerly applied as variable is now applied in the form of constant capital, so that only the distribution between the components of the same capital has changed, this does indeed have an influence on the rate of surplus-value and of profit — but it does not belong under the heading, considered here, of tying-up and release of capital.

Constant capital, as we already saw, can also be tied up or released as a result of a rise or fall in the value of the elements it is made of. Setting that aside, it can only be tied up further, without converting any variable capital into constant capital, when the productivity of labour rises: the same amount of labour then produces a bigger product and so sets more constant capital in motion. The same tying-up can happen, under certain conditions, when productivity falls instead, as in agriculture, where the same amount of labour needs more means of production to get the same product: more seed, more fertilizer, more drainage.

Constant capital can be released with no devaluation at all. This happens when an improvement, or the harnessing of some natural force, lets a constant capital of lesser value do technically the same job a higher-valued one used to do.

We saw in Volume 2 that once commodities have been turned into money and sold, a definite part of that money has to go back into the physical elements of constant capital, in the proportions the branch's own technique requires. In every branch, leaving aside wages, that is, variable capital, the most important of these elements is the raw material, including ancillary materials, which matter especially where no proper raw material enters at all, as in mining and in extractive industry generally.

The part of the price that has to replace the wear-and-tear of machinery enters the accounts in a more notional way, as long as the machinery is still workable at all; it hardly matters whether it is paid and replaced in money today, tomorrow, or at some other point in the capital's turnover time. Raw material is different. If its price rises, it may become impossible to replace it in full out of the commodity's value once wages are deducted. Violent price swings therefore bring on interruptions, major upsets, even catastrophes in the reproduction process.

It is chiefly the genuine products of agriculture, raw materials drawn from organic nature, that are subject to swings in value like this, because harvest yields vary, leaving the credit system aside for now. The same quantity of labour can, because of uncontrollable natural conditions and good or bad seasons, turn into very different quantities of use-value, so that a given amount of that use-value will have a very different price. If a value of x is represented in 100 lb of commodity a, the price of one lb of a is x/100; if it is represented in 1,000 lb of a, the price of one lb is x/1,000, and so on. That is one element in these price swings of raw material.

A second element, mentioned here only for completeness, since competition and the credit system are still outside what we are considering, is this. It lies in the nature of things that plant and animal materials cannot suddenly be increased in the same degree: their growth and production are bound to definite organic laws tied to fixed natural periods. Machines and other fixed capital, coal, ore and so on are not so bound; given the other natural conditions, their increase can happen in the shortest time in an industrially developed country. So it is possible, and under developed capitalist production even unavoidable, that the production and growth of the part of constant capital made of fixed capital, machinery and the like gets a significant lead over the part made of organic raw materials, so that demand for those raw materials grows faster than their supply and their price rises.

This rise in price in fact brings about: (1) that these raw materials get sourced from further away, since the rising price now covers the greater cost of transport; (2) that their production is increased, though by the nature of the case this may only really increase the mass of product a year later; and (3) that all sorts of previously unused substitutes come into use and waste is handled more economically. By the time the rise in price begins to tell noticeably on the expansion of production and on supply, the turning point has usually already arrived: because of the raw material's continued rise, and the rise in everything made from it, demand falls, and so a reaction sets in on the raw material's price too. Apart from the convulsions this brings about through the devaluation of capital in various forms, other circumstances follow, which we mention next.

It is already clear from what has been said. As capitalist production develops, so do the means for suddenly and continuously increasing the machinery-part of constant capital, and so does the pace of accumulation, fastest of all in prosperous times. The further all this goes, the greater the relative overproduction of machinery and other fixed capital and the more frequent the relative under-production of plant and animal raw materials, and the more marked the rise in their price already described and the reaction that follows it. So the more frequent are the upheavals that have their root in this violent price fluctuation of one of the main elements of the reproduction process.

Suppose the collapse of these high prices now sets in, because their rise has caused a fall in demand on one side, and on the other an expansion of production in the established regions together with supplies drawn from distant ones that had been used little or not at all, and both together bring a supply of raw material that outruns demand, especially outrunning it at the old high prices. The result then has to be looked at from several angles.

The sudden collapse in the price of raw produce puts a brake on its reproduction, and so the monopoly of the countries of origin, which produce under the most favourable conditions, is restored again, restored perhaps with certain limits, but restored all the same. Reproduction of raw materials does go on, on an enlarged scale, as a result of the impulse just given, especially in the countries that more or less hold the monopoly of that production. But the basis on which production now proceeds, thanks to the expanded machinery and so on, and which after some fluctuations counts as the new normal basis, the new starting point, has been greatly enlarged by what happened during the last turnover cycle. At the same time, part of the secondary sources of supply, whose reproduction had only just been stepped up, suffers renewed and significant checking. The export tables, for instance, show plainly how, over the last thirty years, up to 1865, Indian cotton production grows whenever American production falls short, and then suddenly falls back again, more or less lastingly.

During a period of dear raw material, industrial capitalists join together and form associations to regulate production, as after the rise in cotton prices of 1848 in Manchester, and similarly for flax production in Ireland. But as soon as the immediate impulse has passed and the general principle of competition — "buying in the cheapest market" — reigns supreme again, supply is once more left to "price" to regulate. What those associations aim at is the opposite: to favour productive capacity in suitable countries of origin, regardless of the immediate, momentary price at which those countries can supply the product just now. Every idea of a common, all-embracing and far-sighted control of raw-material production gives way to the belief that demand and supply will regulate one another. Such control is on the whole quite incompatible with the laws of capitalist production, and so it always remains a pious wish, or is confined to exceptional joint steps taken in moments of great immediate danger and helplessness. The capitalists' superstition here is so crude that even the factory inspectors, again and again, throw up their hands about it in their reports.

The alternation of good and bad years naturally also brings cheaper raw material again in its turn. Besides the immediate effect this has on expanding demand, there is also the effect, already mentioned, on the rate of profit, acting as a stimulus. And the process just described, in which the production of raw material is gradually overtaken by the production of machinery and the like, then repeats itself on a larger scale.

A genuine improvement in the raw material, so that it was supplied not only in the quantity but also the quality required, cotton of American quality from India, say, would need a long-continued, regularly growing and steady European demand, quite apart from the economic conditions under which the Indian producer is placed at home. As things stand, though, the sphere of production of raw materials is only ever expanded in fits and starts, sometimes suddenly, and then violently contracted again. All this, like the spirit of capitalist production generally, can be studied very well in the cotton famine of 1861-1865, where a raw material that is one of the most essential elements of reproduction was, in addition, for a time completely absent. For a price can rise even when supply is not short — when it is kept up in full, but only out of harder and costlier sources; or there can be a genuine shortage of the material itself. At the outset of the cotton crisis it was a genuine shortage.

The closer we get, in the history of production, to the immediate present, the more regularly we find, especially in the decisive branches of industry, the constantly repeating alternation, in raw materials drawn from organic nature, between a relative dearness and the depreciation that later springs from that same dearness.

What has been set out so far will be found illustrated in the examples that follow, drawn from the reports of the factory inspectors.

The moral of the story, one that can also be drawn from other ways of looking at agriculture, is that the capitalist system runs counter to rational agriculture, or that rational agriculture is incompatible with the capitalist system, although the capitalist system does further technical development in agriculture, and that rational agriculture needs either the hand of the small farmer working for himself, or the control of the associated producers.

Here now are the illustrations just mentioned, taken from the English factory reports.

R. Baker reports: business is better; but the cycle of good times and bad shortens as machinery increases, and as the demand for raw material grows with it, the fluctuations in trade repeat themselves more often too. At the moment, not only has confidence been restored since the panic of 1857, the panic itself seems almost entirely forgotten. Whether this improvement holds or not depends very largely on the price of raw material. Signs are already appearing to me that in some cases the maximum has already been reached, beyond which manufacturing becomes less and less profitable, until finally it yields no profit at all.

Take, for instance, the profitable years in the worsted trade, 1849 and 1850: English combing wool stood at 1s. 1d. and Australian at 1s. 2d. to 1s. 5d. per pound, and on average over the ten years 1841-1850 the average price of English wool never rose above 1s. 2d., nor Australian above 1s. 5d., per pound. But at the start of the disastrous year 1857 Australian wool stood at 1s. 11d.; it fell in December, at the worst point of the panic, to 1s. 6d., but has since risen again in the course of 1858 to the present price of 1s. 9d. English wool likewise started 1857 at 1s. 8d., rose to 1s. 9d. in April and September, fell to 1s. 2d. in January 1858, and has since risen to 1s. 5d., so that it now stands 3d. per pound above the average of the ten years just named.

This shows, to my mind, that either the bankruptcies of 1857, which were owed to similarly high prices, have been forgotten; or that only just enough wool is being produced to keep the existing spindles spinning; or else that the price of cloth is going to undergo a lasting rise. But in my experience so far I have seen how, in an unbelievably short time, spindles and looms have multiplied not only in number but also in running speed; and further, that our wool exports to France have risen in almost the same proportion, while at home and abroad alike the average age of the sheep being kept keeps falling, since population is growing fast and breeders want to turn their stock into money as quickly as possible. I have therefore often felt anxious, seeing people who, without this knowledge, have put their skill and their capital into undertakings whose success depends on the supply of a product that can only increase according to certain organic laws.

The state of demand and supply for all raw materials seems to explain many of the fluctuations in the cotton trade, and likewise the state of the English wool market in the autumn of 1857 and the trade crisis that followed from it.

The worsted industry of the West Riding of Yorkshire had its best years in 1849 and 1850. The numbers employed in it were 29,246 in 1838, 37,060 in 1843, 48,097 in 1845, and 74,891 in 1850. In the same district there were 2,768 power looms in 1838, 11,458 in 1841, 16,870 in 1843, 19,121 in 1845, and 29,539 in 1850. This boom in the worsted industry was already starting to look shaky by October 1850. In his report of April 1851, sub-inspector Baker says of Leeds and Bradford:

Business has been very unsatisfactory for some time. The worsted spinners are quickly losing the profits of 1850, and most of the weavers are not doing especially well either. I believe that at present more woollen machinery stands idle than ever before, and the flax spinners too are laying off workers and stopping machines. The cycles of the textile industry are in fact extremely uncertain just now, and I think we shall soon come to see... that no proportion is kept between the productive capacity of the spindles, the amount of raw material, and the growth of population.

The same is true of the cotton industry. The very report just cited, from October 1858, goes on:

Since working hours in factories were fixed by law, the figures for raw-material consumption, production and wages in all the textile industries can now be worked out by simple proportion — the old rule of three... I quote from a recent lecture... by Mr Baynes, the present Mayor of Blackburn, on the cotton industry, in which he has put together the industrial statistics of his own district as accurately as possible:

Every actual horsepower drives 450 self-acting mule spindles together with the preparatory machinery, or 200 throstle spindles, or 15 looms for cloth 40 inches wide, together with winding, warping and sizing machinery. Every horsepower employs 2½ workers in spinning, but 10 in weaving; their average wage is a good 10s. 6d. per head per week... The average counts worked are Nos. 30-32 for the warp and Nos. 34-36 for the weft; if we take the yarn produced weekly at 13 ounces per spindle, this gives 824,700 lb of yarn per week, for which 970,000 lb, or 2,300 bales, of cotton are consumed, at a cost of £28,300... In our district, within a radius of five English miles around Blackburn, the weekly cotton consumption is 1,530,000 lb, or 3,650 bales, at a cost of £44,625. This is 1/18 of the entire cotton-spinning of the United Kingdom and 1/6 of all its mechanical weaving.

Baker goes on: according to Mr Baynes's calculations, the total number of cotton spindles in the kingdom would then be 28,800,000, and to keep these fully employed would require 1,432,080,000 lb of cotton a year. But cotton imports, after deducting exports, were only 1,022,576,832 lb in 1856 and 1857; there must therefore necessarily have been a deficit of 409,503,168 lb. Mr Baynes, who was good enough to discuss this point with me, believes that a calculation of annual cotton consumption based on the consumption of the Blackburn district would come out too high, because of differences not only in the counts spun but also in the quality of the machinery. He puts the whole annual cotton consumption of the United Kingdom at 1,000 million lb. But if he is right, and there really is a surplus of supply of 22½ million, then demand and supply would already almost balance even now, without even taking into account the additional spindles and looms that, according to Mr Baynes, are being set up in his own district, and probably, to judge by that, in other districts as well.

1845. The cotton industry is booming. Cotton is very cheap. L. Horner says:

The report says: in the last eight years, business had never been as lively as it was that summer and autumn — especially in cotton spinning. Right through that half year, notices came in every week of new capital going into factories: sometimes new factories being built, sometimes the few empty ones finding new tenants, sometimes existing factories being extended, with new, stronger steam engines and more working machinery being installed.

1846. The complaints begin.

For some time now, the report says, cotton manufacturers have been widely complaining about how depressed their business is... over the last six weeks several factories have started working short time — that is, working usually eight hours a day instead of twelve — and this seems to be spreading. Cotton itself has gone up sharply in price, yet there has been no rise in the price of the finished goods; if anything, prices are lower than they were before cotton went up. The great increase in the number of cotton factories over the last four years must have produced, on one side, a much bigger demand for the raw material, and on the other, a much bigger supply of finished goods reaching the market. Both of these together must have pushed profit down even if the supply of raw material and the demand for the finished goods had stayed the same — but they have worked far more strongly than that, because the supply of cotton has recently fallen short, while demand for the finished goods has dropped in various markets at home and abroad.

The rising demand for raw material and the flooding of the market with finished goods naturally go hand in hand. This was not confined to the cotton districts, incidentally: in the worsted district of Bradford there were only 318 mills in 1836, but 490 by 1846. Yet these numbers understate how much production really grew, since the mills already standing were, at the same time, being substantially enlarged. The same holds, in particular, for flax-spinning.

The report goes on: all of these, in varying degrees, have over the last ten years helped overstock the market, and the present stagnation of business must largely be put down to that. A depressed state of business follows quite naturally from such a rapid expansion of factories and machinery.

1847. In October, a money crisis. The bank's discount rate at 8 per cent. Even before that, the railway bubble had already collapsed, and so had the East Indian bill speculation. But:

Baker gives some very interesting detail on the rising demand for cotton, wool and flax in recent years, driven by the expansion of these industries. He considers the increased demand for these raw materials — coming, as it did, at a time when their supply had fallen well below average — almost enough on its own to explain the present depressed state of these trades, without even calling in the disruption of the money market. My own observations, and what I have learned from people who know the business, fully bear this view out. These various branches of trade were already quite depressed while bills could still be discounted — money raised on them at short notice — easily at 5 per cent and under. Raw silk, by contrast, was supplied plentifully, prices were moderate, and business was correspondingly brisk — until, in the last two or three weeks, the money crisis has undoubtedly affected not only the silk throwsters themselves but, even more, their main customers, the manufacturers of fashion goods. A look at the published official reports shows that the cotton industry has grown by nearly 27 per cent over the last three years. As a result, cotton has risen, roughly speaking, from 4d. to 6d. a pound, while cotton twist, thanks to the increased supply, stands only a trifle above its former price. The wool industry began expanding in 1836; since then it has grown by 40 per cent in Yorkshire, and even more in Scotland. Greater still is the growth in the worsted industry: the figures show an expansion of over 74 per cent for the same period. The consumption of raw wool has accordingly been enormous. The linen industry shows a growth, since 1839, of about 25 per cent in England, 22 per cent in Scotland, and nearly 90 per cent in Ireland; the result of this, together with poor flax harvests at the same time, was that the raw material rose by £10 a ton, while the price of yarn fell by 6d. a bundle.

1849. Business had picked up again since the final months of 1848.

Flax prices, the report says, were so low that they secured a tolerable profit under almost any conceivable future conditions, which led manufacturers to keep their business running steadily. Wool manufacturers were, for a time early in the year, very heavily occupied... though I fear that consignments of woollen goods often stand in for real demand, and periods of apparent prosperity — that is, of full work — do not always coincide with periods of genuine demand. For several months the worsted trade has been especially good... At the start of the period just mentioned, wool stood particularly low; the spinners had bought at good prices, and certainly in substantial quantities too. When the price of wool rose with the spring auctions, the spinners had the benefit of it, and they kept that benefit, since demand for the finished goods became considerable and could not be turned away.

The same report goes on: if we look at the ups and downs that have run through the factory districts for the last three or four years now, we must, I think, admit that some great cause of disturbance is at work somewhere... Could it not be that the immense productive power of this increased machinery has supplied a new element here?

Through November 1848, and again in May and the summer months up to October 1849, business grew steadily more brisk.

This is truest of all, the report says, for the manufacture of worsted cloth centred on Bradford and Halifax; this trade has never before come anywhere near its present scale... Speculation in the raw material, and uncertainty about how much of it is likely to be available, has always caused more excitement and more frequent swings in the cotton industry than in any other branch. Just now, a build-up of stocks of the coarser cotton goods is taking place, which is worrying the smaller spinners and has already put them at a disadvantage, so that several of them are working short time.

1850. April. Business remains brisk. The exception:

There is great depression in part of the cotton industry, due to an insufficient supply of raw material — specifically the material suited to spinning the low numbers of cotton yarn and to the heavier cotton goods... It is feared that the increased machinery recently installed for the worsted trade will bring about a similar reaction. Baker calculates that in 1849 alone, in this branch, the output of the looms rose by 40 per cent and that of the spindles by 25 to 30 per cent, and the expansion is still proceeding at the same rate.

1850. October.

The price of cotton, the report says, continues... to cause considerable depression in this branch of industry, especially for those goods where the raw material makes up a large part of the production cost. The great rise in the price of raw silk has brought the same pressure in many cases.

According to the committee report on flax cultivation in Ireland cited here, the high price of flax — together with the low price then standing for other agricultural produce — had already secured a considerable increase in flax production for the following year.

1853. April. Great prosperity.

L. Horner says: in the seventeen years I have known the Lancashire factory district in an official capacity I have never seen such general prosperity; activity is extraordinary in every branch.

1853. October. The cotton industry is depressed. The report's own word for it: "Overproduction."

1854. April.

The report says: the wool trade, though not brisk, has kept every mill fully employed; the same is true of the cotton industry. The worsted trade was irregular right through the whole of the past half-year... In the linen industry there was disruption, caused by reduced supplies of flax and hemp from Russia on account of the Crimean War.

1859.

Business in the Scottish linen industry is still depressed, the report says, because the raw material is scarce and dear; the poor quality of last year's harvest in the Baltic countries — where our main supply comes from — will hurt trade in this district. Jute, though, which is gradually pushing flax out of many of the coarser goods, is neither unusually dear nor scarce; about half the machinery in Dundee is now spinning jute.

Owing to the high price of the raw material, the report adds some months later, flax spinning is still nowhere near profitable, and while every other mill is running full time, there are several cases of flax machinery being stopped altogether. Jute spinning is in a more satisfactory position, since that material has recently come down to a more moderate price.

April 1860.

A report said: "Business is doing well in almost every branch of textiles except silk, despite the high price of raw materials, over the last six months. In some of the cotton districts, workers have been recruited by advertisement and have moved there from Norfolk and other rural counties. There seems to be a great shortage of raw material in every branch of industry — that shortage alone is what holds us back. In the cotton trade, the number of new factories built, the extension of existing ones, and the demand for workers have probably never been as great as now. People are searching for raw material in every direction."

October 1860.

A report said: "Business in the cotton, wool and flax districts has been good; in Ireland it is said to have been very good for over a year now, and would have been better still without the high price of raw material. Flax spinners seem to be waiting more impatiently than ever for India's resources to be opened up by the railways, and for its agriculture to develop to match, so that they can finally get a supply of flax that meets their needs."

April 1861.

A report said: "Business is depressed at the moment. A few cotton factories are working short time, and many silk factories are only partly employed. Raw material is dear. In almost every branch of textiles, it costs more than it can be processed for and still reach the mass of consumers."

It was now plain that the cotton industry had overproduced in 1860 — more goods made than the market could take — and the effect of it was still being felt for years after.

One report said it took two to three years for the 1860 overproduction to be absorbed by the world market.

Another report explained: "The depressed state of the markets for cotton goods in East Asia, from early 1860, had a corresponding effect on business in Blackburn, where on average 30,000 power looms are employed almost exclusively in producing cloth for that market. Demand for labour there was accordingly already limited many months before the effects of the cotton blockade were felt... Fortunately, this saved many manufacturers from ruin. Their stocks rose in value while they were held in store, and so they escaped the alarming depreciation that such a crisis would otherwise have made unavoidable."

October 1861.

A report said: "Business has been very depressed for some time... It is far from unlikely that during the winter months many factories will cut working hours sharply. This, though, could have been foreseen... quite apart from the causes that have interrupted our usual cotton supply from America and our exports, a cut in working hours would have become necessary for the coming winter anyway, because of the sharp rise in production over the last three years and disruptions in the Indian and Chinese markets."

One manufacturer wrote to the inspector: "On the question of how much cotton is used per spindle, you probably aren't taking enough account of this: when cotton is dear, every spinner of ordinary yarns (say up to No. 40, mainly Nos. 12 to 32) spins as fine a count as he possibly can — he spins No. 16 where he used to spin No. 12, or No. 22 where he used to spin No. 16, and so on. And the weaver who weaves these finer yarns brings his cloth back up to the usual weight by adding that much more size. This resource is now being used to a really shameful degree. I have heard on good authority of ordinary shirtings for export where the piece weighs 8 pounds, of which 2¾ pounds were size. In other kinds of cloth as much as 50 per cent size is often added — so the manufacturer who boasts of getting rich by selling his cloth for less money per pound than he paid for the yarn it was made from is by no means lying."

A report said: "I have also been told that the weavers put their increased sickness down to the size used for the warps spun from Surat cotton, which no longer consists simply of flour as it used to. This substitute for flour is said to have the great advantage of considerably increasing the weight of the cloth, so that 15 pounds of yarn, once woven, become 20 pounds." (The substitute was ground talcum, called China clay, or gypsum, called French chalk.)

"The weavers' earnings" (meaning the operatives here) "are much reduced by the use of substitutes for flour as warp size. This size makes the yarn heavier, but also hard and brittle. Every thread of the warp runs, in the loom, through what is called the heald, whose strong threads hold the warp in its proper position; the hard-sized warps cause constant thread-breaks in the heald; every break costs the weaver five minutes to repair; the weaver now has to mend this damage at least ten times as often as before, and naturally the loom does that much less work during the working hours."

A report said: "In Ashton, Stalybridge, Mossley, Oldham and elsewhere, working time has been cut by a full third, and hours are still being shortened further every week... Alongside this cut in working time, wages are also being reduced in many branches."

In early 1861 a strike broke out among the power-loom weavers in parts of Lancashire. Several factory-owners had announced a wage cut of 5 to 7½ per cent; the workers insisted that wage rates be kept the same but working hours shortened instead. This was refused, and the strike began. After a month the workers had to give in. But now they got both:

A report said: "Besides the wage cut the workers finally agreed to, many factories are now also working short time."

April 1862.

A report said: "The workers' sufferings have grown considerably since the date of my last report; but at no time in the industry's history have such sudden and severe sufferings been borne with so much silent resignation and such patient self-respect.

The proportion of workers now completely unemployed seems not much greater than in 1848, when an ordinary panic prevailed — one serious enough, though, to prompt worried manufacturers to compile similar statistics on the cotton industry to those now issued weekly. In May 1848, of all the cotton workers in Manchester, 15 per cent were unemployed, 12 per cent were working short time, while over 70 per cent were in full employment. On 28 May 1862, 15 per cent were unemployed, 35 per cent were working short time, 49 per cent full time. In the neighbouring towns, for instance Stockport, the percentage of those not fully employed or not employed at all is higher, and the percentage of those fully employed is lower."

That is because coarser counts are spun there than in Manchester.

October 1862.

A report said: "According to the latest official statistics, in 1861 there were 2,887 cotton factories in the United Kingdom, of which 2,109 were in my district (Lancashire and Cheshire)."

The inspector continued: "I well knew that a very large proportion of the 2,109 factories in my district were small establishments employing only a few people. But I was surprised to discover how large that number is. In 392, or 19 per cent, the motive power — steam or water — is under 10 horsepower; in 345, or 16 per cent, between 10 and 20 horsepower; in 1,372 it is 20 horsepower or more... A very large share of these small manufacturers — more than a third of the total — were themselves working men not long ago; they are people without command of capital... The main burden would therefore fall on the remaining two-thirds."

According to the same report, of the cotton workers in Lancashire and Cheshire, 40,146, or 11.3 per cent, were then fully employed; 134,767, or 38 per cent, were working short time; 179,721, or 50.7 per cent, were unemployed. If one subtracts from this the figures for Manchester and Bolton — where mainly fine counts are spun, a branch relatively little affected by the cotton shortage — the picture looks even worse: fully employed 8.5 per cent, working short time 38 per cent, unemployed 53.5 per cent.

A report said: "It makes a real difference to the workers whether good or bad cotton is being processed. In the first months of the year, as manufacturers tried to keep their factories running by using up all the cotton that could be bought at moderate prices, a great deal of bad cotton came into factories that had previously used good cotton as a rule; the difference in the workers' wages was so great that many strikes broke out, because at the old piece-rate they could no longer earn a tolerable day's wage... In some cases the difference from using bad cotton, even at full working time, came to half of the total wage."

April 1863.

A report said: "In the course of this year there will not be full work for much more than half the cotton workers."

A report said: "A very serious drawback in using Surat cotton, which the factories now have to use, is that the speed of the machinery has to be considerably slowed down because of it. In recent years everything possible was done to increase that speed, so that the same machinery did more work. But the reduced speed hits the worker just as much as the manufacturer, because most workers are paid by the piece — the spinners so much per pound of yarn spun, the weavers so much per piece woven — and even among the other workers, who are paid by the week, a wage reduction would follow from the reduced output. According to my inquiries... and the figures I was given for cotton workers' earnings over the course of this year... it comes to an average reduction of 20 per cent, in some cases 50 per cent, calculated against the wage levels that prevailed in 1861."

Another report said: "The amount earned depends... on what kind of material is being worked... The workers' position, so far as the wages earned go, is much better now" (October 1863) "than at this time last year. The machinery has been improved, the raw material is better understood, and the workers cope more easily with the difficulties they first had to struggle with. Last spring I was in a sewing school in Preston" (a charity institution for the unemployed) "— two young girls, sent the day before to a weaving-shed on the manufacturer's word that they could earn 4s. a week, asked to be taken back into the school and complained that they had not been able to earn even 1s. a week. I have had figures for self-acting minders — men in charge of a couple of self-actors — who, after fourteen days of full working time, had earned 8s. 11d., and from this sum their house rent was deducted, though the manufacturer" (how generous!) "gave them back half the rent as a gift. The minders took home the sum of 6s. 11d. In some places the self-acting minders earned 5s. to 9s. a week, the weavers 2s. to 6s. a week, during the last months of 1862... At present things are in a much healthier state, although earnings in most districts have still fallen a great deal... Several other causes have added to the lower earnings, besides the shorter staple of the Surat cotton and its impurities. For instance, it is now the custom to mix a good deal of cotton waste in with the Surat, which of course makes things still harder for the spinner. Because the fibre is short, the threads break more easily when drawn out of the mule and when the yarn is twisted, and the mule cannot be kept running as steadily... Likewise, given the close attention the threads need, a female weaver can often watch only one loom, and very few more than two... In many cases the workers' wages have been cut outright by 5, 7½ and 10 per cent... in most cases the worker simply has to manage with the raw material as it is and earn what he can at the usual wage-rate... Another difficulty the weavers sometimes face is that they are expected to make good cloth out of bad material, and are punished with wage deductions when the work does not turn out as wanted."

Wages were wretched, even where people worked full time. The cotton workers turned readily to whatever public work they were put to — drainage, road-building, stone-breaking, street-paving — in order to get relief from the local authorities (relief that was really relief for the factory-owners, as Volume 1 showed). The whole bourgeoisie stood guard over the workers. If the worst starvation wage was offered and a worker would not take it, the relief committee struck him off the list. It was a golden time for the factory-owners in this sense: the workers either starved or worked at whatever price was most profitable for the bourgeoisie, with the relief committees acting as their guard-dogs.

At the same time the factory-owners, in secret agreement with the government, blocked emigration as far as they could — partly to keep the capital that existed in their workers' flesh and blood always ready to hand, partly to secure the house-rent they extorted from the workers.

A report says: the relief committees were very strict on this point. When work was offered, the workers to whom it was offered were struck off the list and so forced to take it. If they refused to start the work... the reason was that their pay would be merely nominal while the work itself would be extremely hard.

The workers were willing to take on any kind of work they were given under the Public Works Act.

The rules for organizing this work varied a great deal from town to town. But even in places where working outdoors was not strictly meant as a labour test, the pay was either just the ordinary relief allowance, or only trivially higher than it — so that in practice it became a labour test all the same.

The Public Works Act of 1863 was meant to remedy this evil and let a worker earn his daily wage as an independent day-labourer. The Act had three purposes: first, to let local authorities borrow money — with the consent of the president of the central poor-law board — from the loan commissioners; second, to make it easier to carry out improvements in the towns of the cotton districts; third, to give the unemployed work and remunerative wages.

By the end of October 1863, loans amounting to £883,700 had been approved under this Act. The work undertaken was mainly sewers and drains, road-building, street-paving, and reservoirs for waterworks, among other things.

Mr Henderson, chairman of the Blackburn committee, writes to Factory Inspector Redgrave on this point:

Throughout the whole of my experience during the present time of suffering and distress, nothing has struck me more forcibly, or given me more pleasure, than the cheerful readiness with which the unemployed workers of this district have taken up the work offered them by the Blackburn town council under the Public Works Act. One could hardly imagine a greater contrast than that between the cotton-spinner who once worked as a skilled hand in the mill, and now labours as a day-labourer in a sewer 14 or 18 feet deep.

(Depending on the size of the family, they earned 4 to 12 shillings a week — and that huge sum often had to be enough for a family of 8. The municipal philistines made a double profit out of this: first, they got the money to improve their smoky, neglected towns at exceptionally low interest; second, they paid the workers far below the regular wage rates.)

He was used to a heat that was almost tropical, to work in which a quick and accurate hand counted for far more than muscle, and to twice or even three times the pay he can earn now. That he took the work offered him willingly shows a self-denial and a consideration that do him the greatest credit. In Blackburn the men have been tried at almost every possible kind of outdoor work: digging out stiff, heavy clay to a considerable depth, drainage, stone-breaking, road-building, digging street sewers to depths of 14, 16 and sometimes 20 feet. They often stand in 10 to 12 inches of mud and water, and every time they are exposed to a climate whose wet cold no district in England beats, and perhaps none even equals.

The workers' conduct has been almost blameless... their readiness to take up outdoor work and make the best of it.

April 1864.

The report says: one occasionally hears complaints in various districts about a shortage of workers, chiefly in certain branches such as weaving... but these complaints arise as much from the low pay workers can earn because of the poor kinds of yarn being used, as from any real scarcity of workers in that particular branch. Numerous disputes over wages took place last month between certain manufacturers and their workers. I regret that strikes have occurred all too often... The mill-owners feel the effect of the Public Works Act as competition, and as a result the local committee at Bacup has suspended its work, for although not all the mills are running yet, a shortage of workers has already appeared.

It was certainly high time for the factory-owners. Because of the Public Works Act, demand rose so much that in the quarries near Bacup some mill-workers were now earning 4 to 5 shillings a day. And so the public works were gradually shut down — this new edition of the Ateliers nationaux of 1848, but this time set up for the benefit of the bourgeoisie.

Although I have given the very much reduced wage (of the fully employed) as the workers' real earnings in various mills, it by no means follows that they earn the same sum week after week. The workers here are subject to great fluctuations because the manufacturers are constantly experimenting with different kinds and proportions of cotton and waste in the same mill; the 'mixings', as they are called, are changed frequently, and the workers' earnings rise and fall with the quality of the cotton mixture. At times it stayed at only 15 per cent of the former earnings, and within a week or two fell to 50 or 60 per cent.

Inspector Redgrave, who is speaking here, now gives wage schedules drawn from practice, of which the following examples will suffice:

A, weaver, family of 6 people, employed 4 days a week, 6s. 8½d.; B, twister, 4½ days a week, 6s.; C, weaver, family of 4, 5 days a week, 5s. 1d.; D, slubber, family of 6, 4 days a week, 7s. 10d.; E, weaver, family of 7, 3 days, 5s., and so on. Redgrave continues:

These schedules above deserve attention, for they prove that in some families work would turn out to be a misfortune. It does not merely reduce the income; it brings it so low that it covers only a very small part of what the family absolutely needs — and it would do so, were additional relief not given in the cases where a family's earnings fall short of the sum it would receive as relief if all its members were unemployed.

The same report adds: in no week since 5 June 1863 has the average total employment of all the workers been more than two days, 7 hours and a few minutes.

From the start of the crisis until 25 March 1863, almost £3 million was spent by the poor-law authorities, the central relief committee, and the London Mansion House committee.

One report says: in one district where perhaps the finest yarn is spun... the spinners suffer an indirect wage cut of 15 per cent because of the switch from Sea Island to Egyptian cotton... In one large district where cotton waste is used in quantity, mixed with Indian cotton, the spinners have had a wage reduction of 5 per cent and have lost a further 20 to 30 per cent because of working Surat and waste. The weavers have come down from four looms to two. In 1860 they made 5s. 7d. on each loom; in 1863 only 3s. 4d.... The fines on American cotton, which used to vary from 3d. to 6d. (for the spinner), now run as high as 1s. to 3s. 6d.

In one district where Egyptian cotton was used, mixed with East Indian cotton:

The average wage of the mule-spinners in 1860 was 18s. to 25s., and is now 10s. to 18s. This is not caused solely by the worse cotton, but also by the reduced speed of the mule, needed to give the yarn a stronger twist — for which, in ordinary times, extra payment would have been made according to the wage-list.

Although East Indian cotton may here and there have been worked at a profit for the manufacturer, we nonetheless see, from the wage list itself, that the workers suffer by it, compared with 1861. If the use of Surat becomes established, the workers will demand the same earnings as in 1861; but this would seriously affect the manufacturer's profit, if it is not offset by the price, whether of the cotton or of the manufactured goods.

The report says: the workers' house rent, where the cottages they live in belong to the manufacturer, is often deducted from their wages by him, even in a week of short time. All the same, the value of these buildings has fallen, and small houses can now be had 25 to 50 per cent cheaper than before; a cottage that used to cost 3s. 6d. a week can now be had for 2s. 4d., and sometimes for even less.

Emigration. The manufacturers were naturally opposed to the workers' emigrating, partly because they

"...wanted to keep the means at hand, in expectation of better times for the cotton industry, to run their mill to the best advantage." Then too, "some manufacturers own the houses their employed workers live in, and at least some of them count firmly on later being paid part of the back rent that has accumulated."

Mr Bernal Osborne says, in a speech to his parliamentary electors on 22 October 1864, that the workers of Lancashire behaved like the philosophers of antiquity (the Stoics). Not like sheep?