From the earliest recorded times down to the period of the Industrial Revolution, the textile crafts and the commerce based upon them had in more than one important sense occupied a central position in economic history. The weaving of home-spun fabrics had always furnished the main transitional link between the world of the self-subsisting agriculturalist and the world of specialised industry. Moreover, this almost universally diffused domestic manufacture, organised for the supply of distant markets, represents a phase of industrial development historically intermediate between the “handcraft system” of the mediæval city and the factory system of the nineteenth century; and the fabrics thus produced, the silks of China, Italy and France, the cottons of India and Central Asia, the fine woollens of Flanders and Florence, the kerseys and broadcloths of England, the linens of Holland and Silesia, the fustians of Barcelona and Bavaria, have been in turn during twenty centuries amongst the chief commodities of international and intercontinental trade. For these reasons the story of the textile crafts affords better illustrations than could be obtained from any other source of three of the main aspects of economic history--_i.e._ (1) that of social differentiation and the formation of classes; (2) that of the development of industrial and commercial organisation, and (3) that of the development of the industrial and commercial policies of modern states. That the Lancashire cotton industry possesses this representative character is a commonplace. In no other modern industry can the emergence and separate organisation of a wage-earning class, the development of the factory system and the world market, the story of industrial legislation and of British commercial policy in the nineteenth century be so adequately studied. But the cotton industry is, as Mr. Daniels has shown, a new graft on an old stock. Long before it passed under the factory system it was organised on a capitalist basis, derived in all probability from the fustian manufacture which it had displaced. The account of the disputes of the smallware and check weavers with their employers in 1758-1759, and of their formation and enforced repudiation of box clubs, shows clearly that whilst, as regards their economic dependence on their employers, their status differed little from that of the hand-loom weaver in the early nineteenth century; their methods of combined action were essentially the same as those that prevailed amongst the textile crafts in the fifteenth century. A brief consideration, therefore, of the earlier phases in the organisation of labour and capital in the textile industries as a whole may serve to place the modern cotton industry on the right historical perspective and help to account for the unique rapidity of its expansion. II