| Summary: | This article shows why and how the embroidery industry on Madeira was integrated into a global trading network between 1880 and 1916. Due to instability of the domestic market, German textile merchants got involved in this industrial sector, thus being confronted with intensely competitive international markets that demanded maximum cost effectiveness. Thanks to significant improvements in the transportation sector, freight charges suffered from a severe decline that counterbalanced the adverse effects of high-level protectionist tariffs on pricing. Moreover, German businessmen made use of the drawback system to reduce customs duties. Hence, they had to break up the holistic cottage-based embroidery production into separated individual steps, divided between different locations on Madeira and in Germany. In this way, they could profit from the extremely low salaries of embroiderers working in a putting-out system. The international competitiveness, increased by those cost benefits, facilitated the conquest of promising emerging markets.
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