As Edward Law remarked before the House of Lords Committee on the Woollen Trade in May 1800, ‘from the wool grower to the consumer a piece of broadcloth passes through an hundred different hands’ At each change of hands the possibility of credit extension arose. The dynamic potential of the textile manufacturer, enmeshed in the centre of this credit web, was much conditioned by prevailing credit terms. To understand how the organisation of trade and credit practice changed over time is thus of fundamental importance in analysing the sources of finance for the growth and expansion of production.

Technological and organisational developments in wool textile manufacturing were accompanied by considerable change in the methods and organisation of trade in both the raw materials and the finished products of the industry. The geographical distance over which trade took place (associated with changing markets and sources of raw material supply); the activities of merchants, middlemen and factors; the development of speedier communications; changes in the turnover time of capital: all these affected the chain of credit, linking the various parts of trade to the whole. Superimposed upon the effects of these long-term factors, credit practices were further influenced by short-term economic instability and trade fluctuations.