The advent of the Industrial Revolution in Britain provided a great boost to cotton manufacture, as textiles emerged as Britain's leading export. In 1738, Lewis Paul and John Wyatt, of Birmingham, England, patented the roller spinning machine, as well as the flyer-and-bobbin system for drawing cotton to a more even thickness using two sets of rollers that traveled at different speeds. Later, the invention of the James Hargreaves' spinning jenny in 1764, Richard Arkwright's spinning frame in 1769 and Samuel Crompton's spinning mule in 1775 enabled British spinners to produce cotton yarn at much higher rates. From the late 18th century on, the British city of Manchester acquired the nickname "Cottonopolis" due to the cotton industry's omnipresence within the city, and Manchester's role as the heart of the global cotton trade.
Production capacity in Britain and the United States was improved by the invention of the modern cotton gin by the American Eli Whitney in 1793. Before the development of cotton gins, the cotton fibers had to be pulled from the seeds tediously by hand. By the late 1700s, a number of crude ginning machines had been developed. However, to produce a bale of cotton required over 600 hours of human labor, making large-scale production uneconomical in the United States, even with the use of humans as slave labor. The gin that Whitney manufactured reduced the hours down to just a dozen or so per bale. Although Whitney patented his own design for a cotton gin, he manufactured a prior design from Henry Odgen Holmes, for which Holmes filed a patent in 1796. Improving technology and increasing control of world markets allowed British traders to develop a commercial chain in which raw cotton fibers were purchased from colonial plantations, processed into cotton cloth in the mills of Lancashire, and then exported on British ships to captive colonial markets in West Africa, India, and China .
By the 1840s, India was no longer capable of supplying the vast quantities of cotton fibers needed by mechanized British factories, while shipping bulky, low-price cotton from India to Britain was time-consuming and expensive. This, coupled with the emergence of American cotton as a superior type encouraged British traders to purchase cotton from plantations in the United States and plantations in the Caribbean. By the mid-19th century, "King Cotton" had become the backbone of the southern Americaneconomy. In the United States, cultivating and harvesting cotton became the leading occupation of slaves.
During the American Civil War, American cotton exports slumped due to a Union blockade on Southern ports, and also because of a strategic decision by the Confederate government to cut exports, hoping to force Britain to recognize the Confederacy or enter the war. This prompted the main purchasers of cotton, Britainand France, to turn to Egyptian cotton. British and French traders invested heavily in cotton plantations. The Egyptian government of Viceroy Isma'il took out substantial loans from European bankers and stock exchanges. After the American Civil War ended in 1865, British and French traders abandoned Egyptian cotton and returned to cheap American exports, sending Egypt into a deficit spiral that led to the country declaring bankruptcy in 1876, a key factor behind Egypt's occupation by the British Empire in 1882.
During this time, cotton cultivation in the British Empire, especially Australia and India, greatly increased to replace the lost production of the American South. Through tariffs and other restrictions, the British government discouraged the production of cotton cloth in India; rather, the raw fiber was sent to England for processing. The Indian Mahatma Gandhi described the process:
1. English people buy Indian cotton in the field, picked by Indian labor at seven cents a day, through an optional monopoly.
2. This cotton is shipped on British ships, a three-week journey across the Indian Ocean, down the Red Sea, across the Mediterranean, through Gibraltar, across the Bay of Biscay and the Atlantic Ocean to London. One hundred per cent profit on this freight is regarded as small.
3. The cotton is turned into cloth in Lancashire. You pay shilling wages instead of Indian pennies to your workers. The English worker not only has the advantage of better wages, but the steel companies of England get the profit of building the factories and machines. Wages; profits; all these are spent in England.
4. The finished product is sent back to India at European shipping rates, once again on British ships. The captains, officers, sailors of these ships, whose wages must be paid, are English. The only Indians who profit are a few lascars who do the dirty work on the boats for a few cents a day.
5. The cloth is finally sold back to the kings and landlords of India who got the money to buy this expensive cloth out of the poor peasants of India who worked at seven cents a day.