London, Sept. 21, 1861 The continual rise in the prices of raw cotton begins at last to seriously react upon the cotton factories, their consumption of cotton being now 25 per cent less than the full consumption. This result has been brought about by a daily lessening rate of production, many mills working only four or three days per week, part of the machinery being stopped, both in those establishments where short time has been commenced and in those which are still running full time, and some mills being temporarily altogether closed. In some places, as at Blackburn, for instance, short time has been coupled with a reduction of wages. However, the short-time movement is only in its incipient state, and we may predict with perfect security that some weeks later the trade will have generally resorted to three days working per week, concurrently with a large stoppage of machinery in most establishments. On the whole, English manufacturers and merchants were extremely slow and reluctant in acknowledging the awkward position of their cotton supplies. In the innermost recesses of the mercantile mind the notion was cherished that the whole American crisis, and, consequently, the blockade, would have ceased before the end of the year, or that Lord Palmerston would forcibly break through the blockade. The latter idea has been altogether abandoned, since, beside all other circumstances, Manchester became aware that two vast interests, the monetary interest having sunk an immense capital in the industrial enterprises of Northern America, and the corn trade, relying on Northern America as its principal source of supply, would combine to check any unprovoked aggression on the part of the British Government. The hopes of the blockade being raised in due time, for the requirements of Liverpool or Manchester, or the American war being wound up by a compromise with the Secessionists, have given way before a feature hitherto unknown in the English cotton market, viz., American operations in cotton at Liverpool, partly on speculation, partly for reshipment to America. Consequently, for the last two weeks the Liverpool cotton market has been feverishly excited, the speculative investments in cotton on the part of the Liverpool merchants being backed by speculative investments on the part of the Manchester and other manufacturers eager to provide themselves with stocks of raw material for the Winter. The extent of the latter transactions is sufficiently shown by the fact that a considerable portion of the spare warehouse room in Manchester is already occupied by such stocks, and that throughout the week beginning with Sept. 15 and ending with Sept. 22, Middling Americans had increased 3/8d. per lb, and fair ones 5/8;d. From the outbreak of the American war the prices of cotton were steadily rising, but the ruinous disproportion between the prices of the raw material and the prices of yarns and cloth was not declared until the last weeks of August. Till then, any serious decline in the prices of cotton manufactures, which might have been anticipated from the considerable decrease of the American demand, had been balanced by an accumulation of stocks in first hands, and by speculative consignments to China and India. Those Asiatic markets, however, were soon overdone. Some other circumstances contributed to contract the Indian market. The late famine in the north-western provinces has been succeeded by the ravages of the cholera, while throughout Lower Bengal an excessive fall of rain, laying the country under water, seriously damaged the rice crops. In letters from Calcutta, which reached England last week, sales were reported giving a net return Of 9 d. per pound for 40s twist, which cannot be bought at Manchester for less than 11 3/8d., while sales of 40-inch shirtings, compared with present rates at Manchester, yield losses at 7 d., 9d., and 12d. per piece. In the China market, prices were also forced down by the accumulation of the stocks imported. Under these circumstances, the demand for the British cotton manufactures decreasing, their prices can, of course, not keep pace with the progressive rise in the price of the raw material; but, on the contrary, the spinning, weaving, and printing of cotton must, in many instances, cease to pay the costs of production. Take, as an example, the following case, stated by one of the greatest Manchester manufacturers, in reference to coarse spinning: The consumption of Indian cotton is rapidly growing, and with a further rise in prices, the Indian supply will come forward at increasing ratios; but still it remains impossible to change, at a few months notice, all the conditions of production and turn the current of commerce. England pays now, in fact, the penalty for her protracted misrule of that vast Indian empire. The two main obstacles she has now to grapple with in her attempts at supplanting American cotton by Indian cotton, is the want of means of communication and transport throughout India, and the miserable state of the Indian peasant, disabling him from improving favorable circumstances. Both these difficulties the English have themselves to thank for. English modern industry, in general, relied upon two pivots equally monstrous. The one was the potato as the only means of feeding Ireland and a great part of the English working class. This pivot was swept away by the potato disease and the subsequent Irish catastrophe. A larger basis for the reproduction and maintenance of the toiling millions had then to be adopted. The second pivot of English industry was the slave-grown cotton of the United States. The present American crisis forces them to enlarge their field of supply and emancipate cotton from slave-breeding and slave-consuming oligarchies. As long as the English cotton manufactures depended on slave-grown cotton, it could be truthfully asserted that they rested on a twofold slavery, the indirect slavery of the white man in England and the direct slavery of the black men on the other side of the Atlantic.
Karl Marx in the New-York Tribune 1861