The Royal Exchange was heavily damaged in the Manchester Blitz and in the 1996 Manchester bombing. The current building is the last of several buildings on the site used for commodities exchange, primarily but not exclusively of cotton and textiles.
The cotton industry in Lancashire was served by the cotton importers and brokers based in Liverpool who supplied Manchester and surrounding towns with the raw material needed to spin yarns and produce finished textiles. The Liverpool Cotton Exchange traded in imported raw cotton. In the 18th century the trade was part of part the slave trade in which African slaves were transported to America where the cotton was grown and then exported to Liverpool where the raw cotton was sold. The raw cotton was processed in Manchester and the surrounding the cotton towns and Manchester Royal Exchange traded in spun yarn and finished goods throughout the world including Africa. Manchester's first exchange opened in 1729 but closed by the end of the century. As the cotton industry boomed, the need for a new exchange was recognised.
Thomas Harrison designed the new exchange of 1809 at the junction of Market Street and Exchange Street. Harrison designed the exchange in the Classical style. It had two storeys above a basement and was constructed in Runcorn stone. The cost, £20,000, was paid for in advance by 400 members who bought £50 shares and paid £30 each to buy the site. The semi-circular north façade had fluted Doric columns. The exchange room where business was conducted covered 812 square yards. The ground floor also contained the members' library with more than 15,000 books. The basement housed a newsroom lit by a dome and plate glass windows, its ceiling was supported by a circle of Ionic pillars spaced fifteen feet from the walls. The first-floor dining-room was accessed by a geometrical staircase. The exchange opened to celebrate of the birthday of George III in 1809. It also contained other anterooms and offices. As the cotton trade continued to expand, larger premises were required and its extension was completed in 1849.
The second exchange was replaced by a third designed by Mills & Murgatroyd, constructed between 1867 and 1874. It was extended and modified by Bradshaw Gass & Hope between 1914 and 1931 to form the largest trading hall in England. The trading hall had three domes and was double the size of the current hall. The colonnade parallel to Cross Street marked the its centre. On trading days merchants and brokers struck deals which supported the jobs of tens of thousands of textile workers in Manchester and the surrounding towns. Manchester's cotton dealers and manufacturers trading from the Royal Exchange earned the city the name, Cottonopolis.
The exchange was seriously damaged during World War II when it took a direct hit from a bomb during a German air raid in the Manchester Blitz at Christmas in 1940. Its interior was rebuilt with a smaller trading area. The top stages of the clock tower, which had been destroyed, were replaced in a simpler form. Trading ceased in 1968, and the building was threatened with demolition.