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Tariff Protection and Production in the Early U.S. Cotton Textile Industry

Published online by Cambridge University Press:  03 March 2009

Mark Bils
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Abstract

The importance of tariff protection in the U.S. cotton textile industry is examined quantitatively for the period around 1833. In sharp contradiction to past writings it is found that the industry was almost entirely dependent on protection.

Type
Articles
Information
The Journal of Economic History , Volume 44 , Issue 4 , December 1984 , pp. 1033 - 1045
Copyright
Copyright © The Economic History Association 1984

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References

1 These figures are from Zevin, Robert, “The Growth of Cotton Textile Production After 1815,” in Fogel, R. W. and Engerman, S. L., eds., The Reinterpretation of American Economic History (New York, 1971), pp. 122–24.Google Scholar

2 Taussig, F. W., The Tariff History of the United States (New York, 1964, first published 1892), p. 136.Google Scholar

3 Douglass North, Anderson, Terry, and Hill, Peter, Growth and Welfare in the American Past: A New Economic History (3rd ed.; Englewood Cliffs, 1983), p. 73.Google Scholar Additional examples are Fite, G. C. and Reese, J. E., An Economic History of the United Slates (Boston, 1965), pp. 244–45;Google ScholarLee, Susan and Passell, Peter, A New Economic View of American History (New York, 1979), pp. 90–92;Google Scholar and Zevin, “Growth of Textile Production,” p. 128.Google Scholar A notable exception is David, Paul, “Learning by Doing and Tariff Protection: A Reconsideration of the Case of the Antebellum United States Cotton Textile Industry,” in his Technical Choice, Innovation and Economic Growth (Cambridge, Eng., 1974), pp. 98–99.Google Scholar

4 Even this assumption is not necessary. It is sufficient that:

. Thus one country could have varied cotton input more for a change in quality provided this advantage was offset by other inputs.

5 Zevin, “Growth of Textile Production.” David, “Learning by Doing.”Google Scholar

6 Baines, Edward, History of the Cotton Manufacture in Great Britain (New York, 1966; first published 1835).Google Scholar

7 Zevin, “Growth of Textile Production,” p. 124.Google Scholar

8 See for instance Rosen, Sherwin, “Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition,” Journal of Political Economy, 82 (01 1974), 34–55. The real question is whether the expressions ΔC/Δq and ΔI/Δq can sensibly be represented by (ΔC/Δprice) and (ΔI/Δprice) if quality is multidimensional. For practical purposes the answer would appear to be yes. If the different aspects of quality tend to vary together, then clearly no harm is done by treating quality as unidimensional. It seems very likely that the dimensions of quality do all move roughly together. Prints make use of longer-staple cotton and higher-count yarns. There is no harm in treating quality as unidimensional if changes in the various aspects of quality all have similar impacts on relative factor inputs. This also is very likely true. Working with finer cotton, increasing the count, and printing all involve an increase in labor and other inputs relative to raw cotton.CrossRefGoogle Scholar

9 British Parliamentary Papers, 1836, vol. 46, Accounts and Papers: Relating to Revenue, Population, Commerce, p. 81.Google Scholar

10 An exchange rate of $4.56 to the British pound is used, as given by the official par rate of $4.44, plus an estimated premium on pounds in 1833 of 2.74 percent. See Davis, Lance and Hughes, Jonathan, “A Dollar-Sterling Exchange, 1803–1895,” Economic History Reviev, 13 (08 1960), 54;Google Scholar or Temin, Peter, The Jacksonian Economy (New York, 1969), p. 65.Google Scholar

11 Cole, Arthur, Wholesale Commodity Prices in the United States 1700–1861; Statistical Supplement (Cambridge, Mass., 1938), p. 248.Google Scholar

12 Baines, History, p. 407.Google Scholar

13 Estimates close to this two-ounce waste to the pound figure for around 1833 are given in several sources. Examples are Baines, History, p. 367;Google Scholar and Ellison, Thomas, The Cotton Trade of Great Britain (London, 1968; first published 1886), p. 61.Google Scholar

14 The assumed value of 0.0406 considerably overestimates the negative relationship between cotton and quality, and thus underestimates the importance of the tariff. That the value is clearly an overestimate is apparent from the amounts of cotton it implies would have gone into the average qualities of plain and printed cloth exported to the United States. Above the prices for these quality cloths were given as 12.77 and 14.70 cents per yard. Using the 0.0406 figure to extrapolate from the values in Table 1 implies that a yard of 12.77-cent plain cloth had an inconceivably small cotton input of 0.033 pounds, and a yard of 14.70-cent printed cloth had an even less conceivable input of -0.046 pounds.Google Scholar

15 The U.S. price is from Cole, Wholesale Prices, p. 247; and the British price is from Ellison, Cotton Trade of Britain, Appendix, Table 1.Google Scholar

16 Note this does not require competition in cotton textiles, but only that monopoly profits be unrelated to quality of cloth produced. In fact, there is strong evidence the textile industry was quite competitive. See McGouldrick, Paul, New England Textiles in the Nineteenth Century: Profits and Investment (Cambridge, Mass., 1968), particularly p. 30.Google Scholar

17 On this issue see Habakkuk, H. J., American and British Technology in the Nineteenth Century (Cambridge, Eng., 1962);Google Scholar or Temin, Peter, “Labor Scarcity and the Problem of American Industrial Efficiency in the 1850's” this JOURNAL, 26 (09 1966), 277–98.Google Scholar

18 To be certain of having the desired overestimate it is also necessary that (Δlabor/Δq)·(wage) be no greater than (ΔI/Δq)·PI, but this condition must certainly have been satisfied.Google Scholar

19 Homer, Sidney, A History of Interest Rates (New Brunswick, N.J., 1963), pp. 195, 287.Google Scholar

20 Montgomery, James, Cotton Manufacture of the United States of America (New York, 1969, first published 1840), pp. 112–17, gives some data on the costs of capacity in Britain and the United States. Comparisons are not possible, however, because the two countries used different techniques and therefore different equipment.Google Scholar

21 English estimate is based on information from 225 cotton mills, contained in Baines, History, p. 373.Google Scholar U.S. estimate is obtained by taking a 62.6-cent daily wage given by Layer, Robert, Earnings of Cotton Mill Operatives, 1825–1914 (Cambridge, Mass., 1955), p. 24, and multiplying by 310 days per year (six days per week minus Christmas, Easter, and Thanksgiving).Google Scholar If, alternatively, one takes the $196 in annual earnings for 1860 reported by Wright, Gavin, “Cheap Labor and Southern Textiles before 1880,” this JOURNAL, 39 (09. 1979), 672 (which he obtained from the 1860 U.S. Census of Manufacturing) and reduces it to account for the 4 percent growth in annual earnings between 1833 and 1860 reported for textile workers by Layer (pp. 46–47), a slightly lower estimate of $189 results.Google Scholar

22 Source for Britain is Baines, Hisiory, p. 377;Google Scholar for U.S., Lebergott, Stanley, Manpower in Economic Growth: The American Record Since 1800 (New York, 1964), p. 48.Google Scholar

23 Source for England is Baines, History, p. 379;Google Scholar for Massachusetts, Lebergott, Stanley, “Wage Trends, 1800–1900,” in National Bureau of Economic Research, Trends in the American Economy in the Nineteenth Century: Studies in Income and Wealth. vol. 24 (Princeton, 1960), p. 460.Google Scholar

24 Goldin, Claudia and Sokoloff, Kenneth, “The Relative Productivity Hypothesis of Industrialization: The American Case, 1820 to 1850,” Quarterly Journal of Economics, 99 (08 1984), 461–87.CrossRefGoogle Scholar

25 Source for Britain is Baines, History, pp. 437, 441;Google Scholar for U.S., Dublin, Thomas, Women at Work: The Transfonnation of Work and Cointnunity in Lowell, Massachusetts, 1826–1860 (Ph.D diss., Columbia University, 1975), pp. 42, 152.Google Scholar

26 Bowley, Arthur, Wages in the United Kingdom in the Nineteenth Century (Cambridge, Eng., 1900), Section XV, reports the wages in 1833 of spinners of medium-quality and fine-quality yam as $6.42 and $8.15 per week.Google Scholar

27 This argument assumes that percentage changes in factor prices for a change in quality were equal in the two countries. It might be argued that wages would have risen at a faster rate in the United States due to a more limited supply of relatively skilled workers. For reasonable parameter values, however, I have still found that British advantage rises less with quality than under the simpler assumption of no effect on wages in either country.Google Scholar

28 See Buck, Norman, The Development of the Organization of Anglo-American Trade 1800–1850 (Hamden, Conn., 1969, first published 1925). pp. 14–15, 27–28.Google Scholar

29 See footnote 16.Google Scholar

30 Baines, History, p. 356.Google Scholar

31 Ellison, Cotton Trade of Britain, Appendix, Table 1.Google Scholar

32 David, “Learning by Doing,” p. 162.Google Scholar

33 This is based on the quantity of cotton consumed in each country in 1832, which is contained in Temin, Jacksonian Economy, p. 103.Google Scholar

34 Zevin, “Growth of Textile Production,” p. 122–23.Google Scholar