The Decline of the English Cloth Trade

After 45 years of the queen's rule, James I succeeded Elizabeth I to the English throne in 1603, at which point the English economy was struggling. The population of England was swelling, food production was insufficient, and prices were high. Despite its instability, a few industries brought reliable income to the English economy. In particular, many merchants relied on the export of cloth to continental Europe. For the first decade of James I's reign, the cloth trade prospered and was an important source of revenue for the English. However, the king was to make a serious mistake that would eventually lead to the fall of the English cloth trade.

In 1614, William Cockayne, an English merchant and politician, proposed that James I make a dramatic change to the way the English exported cloth. At the time, the English produced primarily unfinished cloth. This meant that they sold cloth that had not been dyed, bleached, or otherwise processed. Most often, companies in the Netherlands bought the plain cloth from England and finished it themselves. The Dutch were experts in the complex procedures and technologies required to finish cloth, and these processes added significant value to the unfinished cloth they had purchased from England. As a result, Dutch cloth companies could sell their goods at much higher prices than the English could. Hoping to transfer these profits to English companies, Cockayne proposed that the English finish the cloth themselves to increase the value of their cloth exports. He also asked James I to establish a company, which was to function under Cockayne's leadership, that would control and monopolize the export of finished cloth to continental Europe. The king was in need of money, and the prospect of increased revenue appealed to him. Thus, he agreed to Cockayne's plan and, per Cockayne's request, founded the King's Merchant Adventurers, a company with a primary purpose of exporting finished cloth.

However, Cockayne's plan disrupted the previously steady English cloth trade and was ultimately ineffective for a number of reasons. First, James I's support of Cockayne's company created a rift between the king and many powerful English merchants, particularly the members of the unfinished cloth company called the Merchant Adventurers, which had been cast aside in favor of Cockayne's group. Furthermore, the Dutch, who had previously been Europe's main supplier of finished cloth, responded to English competition by refusing to purchase any English cloth products, and many other European nations did the same. In addition, merchants in other countries refused to ship English cloth or charged English businesspeople inflated fees for shipping. The resistance from abroad was particularly damaging to the King's Merchant Adventurers because it could not afford the ships that were necessary to transport its goods to European markets.

In addition to the difficulties caused by its widespread unpopularity, Cockayne's company was unable to produce quality goods. For one, Cockayne did not have the funds to acquire the machines needed to finish cloth. [a] ■ Moreover, English cloth makers were not experts in the finishing process and could not match the high-quality finished cloth produced by their competitors in the Netherlands. [b] ■ By 1617, just three years after the company was established, James I had dissolved the King's Merchant Adventurers. [c] ■

The failure of the King's Merchant Adventurers did more than bankrupt those who had supported its efforts. [d] ■ The damage Cockayne's plan inflicted on the cloth trade had disastrous economic effects on other industries as well. Under the King's Merchant Adventurers, more than 500 families had begun producing finished cloth. However, because they could not sell it, their ventures failed. This caused unemployment to rise and even resulted in riots in London and elsewhere. Furthermore, formerly beneficial trade relationship had been destroyed, and sellers of unfinished cloth had to attempt to reestablish contacts with European buyers who were willing to purchase their goods. Though James I had returned power to the members of the Merchant Adventurers, the group resented the damage that had been done to its business. Business relations were strained both internationally and domestically as the English cloth trade made a slow recovery from Cockayne's experiment.