The English Cotton Industry and the Loss of the World Market

KING COTTON: A TRIBUTE TO DOUGLAS FARNIE, Wilson, J., ed., pp.58-76, Lancaster, Carnegie

York Management School Working Paper No. 30-2007

27 Pages Posted: 8 Aug 2010 Last revised: 27 Jan 2011

See all articles by Steve Toms

Steve Toms

University of Leeds - Leeds University Business School (LUBS); University of Leeds - Division of Accounting and Finance

Date Written: 2009

Abstract

The joint stock company, centred on Oldham, is a central narrative in Douglas Farnie’s seminal book, the English Cotton Industry and the World Market. Farnie was the first to highlight the idiosyncratic nature of these limited companies, including their highly democratic system of governance. Documenting the collapse of this system is a useful post-script to Farnie’s analysis. The chapter will extend Farnie’s contribution by examining new evidence in the pre-1896 period. It will then go on to document subsequent developments after 1896 and show that changes in governance had serious consequences for the industry. Cliques of mill owners, and the speculative stock market capitalism they engendered, promoted over-expansion of the industry and financial instability. The over-expansion of the 1907 boom was repeated with disastrous consequences in the re-capitalisation boom of 1919. It will be shown that the activities of networks local directors, which had been established pre 1914, not financial syndicates, banks, trade unions or government, were responsible for the collapse that precipitated the industry’s long decline.

Keywords: Lancashire, textiles, finance, governance

JEL Classification: N83

Suggested Citation

Toms, Steve, The English Cotton Industry and the Loss of the World Market (2009). York Management School Working Paper No. 30-2007. Available at SSRN: https://ssrn.com/abstract=1654579

Steve Toms (Contact Author)

University of Leeds - Leeds University Business School (LUBS) ( email )

Leeds LS2 9JT
United Kingdom

University of Leeds - Division of Accounting and Finance ( email )

Leeds LS2 9JT
United Kingdom

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