Sometimes it is implied, particularly in popular writings, that the transition from the domestic system, as it existed in the early eighteenth century, to the factory system involved a great change in economic relationships, almost that it marked the emergence of capitalist employers. If disproof of this view were required, this account of the disputes in the smallware and the check trades in Manchester, a generation before factories definitely appeared in the district, would do something to supply it. The fact is, of course, that the domestic system was a system of capitalist employers, and the typical workpeople were in every essential respect related to these employers in the same way as after the factory made its appearance. In the domestic system the employer’s capital was mainly embodied in the materials that were given out to workpeople, and they received a wage remuneration from him for the operations they performed upon them. Between the journeymen and apprentices, and the employer, there frequently intervened persons such as the “undertakers” mentioned in connection with the smallware trade, but these men were essentially employees, even though in many cases, no doubt, they might own three or four looms. In the factory, the workpeople, who previously had been scattered over a more or less wide area, were drawn together under one roof, and their operations supervised by foremen and managers; the capital of the employers was now embodied in materials, buildings, plant and machinery; the least change was seen in the economic relationships between employers and workpeople. If it is true that labour became more dependent upon capital, it is equally true that capital became more dependent upon labour--on both sides the dependence involved was one of a greater co-operation in the processes of production. But there was an important social change, closely connected with the decay of authoritative regulations which had been proceeding from the seventeenth century. As these regulations disappeared, the way was opened for the workpeople to begin to organise themselves as a new social class. Along with the development of the system of organisation which became dominant from the eighteenth century, the modern trade union movement was born, and through the greater part of the century it was also developing. Unfortunately, before the end of the century, under the stress of conditions consequent upon the Revolutionary and Napoleonic wars, its natural growth was checked, and it did not begin to thrive again until these conditions had passed away. III To complete this brief account of the organisation of the Lancashire textile industry before the coming of the factory and the rise of the new cotton manufacture, it is necessary to say something of the ways in which the manufacturers were connected with their workpeople, and also of their connections with the markets for raw materials and for finished products.