The Finance and Growth of the Lancashire Cotton Textile Industry, 1870-1914 J.S.Toms • School of Management and Finance University of Nottingham The cotton industry, and its dark satanic mills, has long been a metaphor for the rise andfall of Britain asa manufacturing economy. Useful questions canthus be addressed by examining the industry's transition from growth to maturity. In 1860, no one would have disputed its world supremacy and domination of the British exporteconomy. By 1922 therewere as many pessimists as optimists regarding future prospects. It is therefore appropriate to investigate the conditions thatgoverned long-term development in the period between these dates. Many previous authors have addressed the broad agenda of the evolution and growth of the cotton industry. In following that agenda, the evidence presented belowis intended primarily as a contribution towards business history offering originality via whatmight be called an accounting method; that is,the use of published company financial statements to assess the performance of individual and groups of businesses. Publications of accounting numbers are treated as historical events and form a body of empirical evidence for judging the behavior and response of entrepreneurs and investors. Accounting techniques may have been relatively primitive, butthe purpose here is to examine what was actually reported under historical conditions, rather than to say what would have been reported under modern conditions. No other business history of Lancashire textiles has thus far sought to make such a direct and integral use of accounting data. Yet such evidence is of relevance to themajor areas of discussion and controversy, such as entrepren- eurship, technology and structure, and the world market, dealt with byprevious histories. The "state of the debates" [Mass and Lazonick, 1990] surrounding them are of particular importance when considering new evidence and the discussion below comments upon them in turn. In doing soit seeks also to develop newperspectives. Obiter dicta, theuse of the accounting method also allows room for comment on issues of accounting history [Toms, 1997]. Similarly, the data used lends itself to the review of aspects of economic, labor, financial, and econometric history (or "cliometrics"), as well as historical geography. • The thesis from which this piece was drawn was written under the supervision of Professor S.D. Chapman and Dr. P.A. Barnes atthe University of Nottingham. BUSINESS AND ECONOMIC HISTORY, Volume Twenty-six, no. 2,Winter 1997. Copyright ¸1997 bythe Business History Conference. ISSN 0894-6825. 323