interest at 5 per cent. was being paid. At the time of Sir Richard's death in 1792 the debt was £12,000, and remained at this amount in 1796. Oldknow's inability to pay the interest on this loan seems to have been one of the main causes of the disposal of his Stockport properties and of the concentration of his business in the spinning-mill at Mellor; but for a considerable amount of the capital invested there Oldknow must have remained indebted to the younger Arkwright, into the hands of whose successors the mill ultimately passed. These facts sufficiently account for the coupling together of Oldknow and Arkwright as partners in the business world and even in bankers' documents, but that either of the Arkwrights exercised any internal control in the management of Oldknow's business, either as a muslin manufacturer or as a spinner, seems to be disproved by all the evidence at our disposal.
The part played by the Arkwrights in effecting the transformation of Oldknow into a factory-master is sufficiently clear. It is now time to notice other factors in this development, and especially the influence of Oldknow's commercial environment. Between the conference at Cromford in September 1786 and the building of Oldknow's spinning mills at Stockport and Mellor four years were to elapse, two lean years followed by two years of prosperity. It was the large profits of the two latter years that supplied the means and seemed to furnish the justification for the magnificent schemes described in Owen's autobiography, but the pressure of competition in the lean years had already convinced Oldknow of the need for an increase of efficiency attainable only in the factory system. Conclusive evidence on this important point is found in the letters of Oldknow during the commercial crisis of 1787, which, as they were written from London to his brother at Stockport, have fortunately been preserved. A few words on the general situation will serve to explain their purport.
The high hopes awakened by the French treaty of 1786 perhaps tended to defeat themselves by inducing speculation. As early as 21 November 1786 Salte wrote to Oldknow, 'A Bubble of an enormous magnitude seems collecting here. It will burst with a great Fury and do much mischief in three or four months.' And again on 15 December, 'The late speculations have done infinite harm to every article made of cotton wool. … This will be like the Shock of an Earthquake to many Persons. … Keep snug and quiet.' Nevertheless the sales of Oldknow as evidenced by his day-book do not show much diminution till the autumn of 1787, when the arrival of the East Indian fleet with unusually large cargoes of muslins, calicoes, and nankeens entirely stopped for a time the demand for some of his chief products. A much-
