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+Project Gutenberg's Bremen Cotton Exchange, by Andreas Wilhelm Cramer
+
+This eBook is for the use of anyone anywhere at no cost and with
+almost no restrictions whatsoever.  You may copy it, give it away or
+re-use it under the terms of the Project Gutenberg License included
+with this eBook or online at www.gutenberg.org
+
+
+Title: Bremen Cotton Exchange
+       1872/1922
+
+Author: Andreas Wilhelm Cramer
+
+Translator: Ch. F. C. Uhte
+
+Release Date: June 7, 2009 [EBook #29065]
+
+Language: English
+
+Character set encoding: ASCII
+
+*** START OF THIS PROJECT GUTENBERG EBOOK BREMEN COTTON EXCHANGE ***
+
+
+
+
+Produced by The Online Distributed Proofreading Team at
+https://www.pgdp.net (This file was produced from images
+generously made available by The Internet Archive/American
+Libraries.)
+
+
+
+
+
+
+[Illustration: Bremer Baumwollboerse, Bremen.]
+
+
+
+
+BREMEN COTTON EXCHANGE
+
+1872/1922
+
+
+
+BY
+
+A. W. CRAMER
+
+PRESIDENT OF THE BREMEN COTTON EXCHANGE
+
+
+
+TRANSLATED BY CH. F. C. UHTE, BREMEN
+
+1922
+FRANZ LEUWER VERLAG
+BREMEN
+
+ALL RIGHTS RESERVED
+COPYRIGHT 1922 BY FRANZ LEUWER
+BREMEN
+
+PRINTED BY
+H. M. HAUSCHILD . BREMEN
+
+A JUBILEE GIFT TO THE
+MEMBERS OF THE BREMEN
+COTTON EXCHANGE
+
+
+
+
+FIFTY YEARS.
+
+
+A period covering 50 years is sure to show to the surviving and the
+younger generations certain milestones, which indicate a trend of human
+thought, or memorize important occurrences. We may look back upon mighty
+wars, or religious upheavals or the cruelties committed in both, or
+another may recall the peaceful thrifty life with its underlying
+romantic thought.
+
+Later generations may possibly call this episode of the last 50 years
+the Period of Economic Development. Every epoch has its dominating
+spirit; sometimes it is a God of War, sometimes a religious martyr,
+sometimes it takes the shape of a great poet and even the thoughts and
+lives of the every-day citizen are the replica of the spirit of its
+time.
+
+The embodiment of the spirit of the last 50 years is a Hercules. This
+famous demi-god executed 12 wondrous deeds, the names of which were
+painfully instilled into us at school, but his mighty deeds made no
+impression on the history of his time. Our Hercules has successfully
+achieved more than twelve wonderful works, nor need we look far afield
+to see the lasting imprint of his footsteps; we have always before us
+the great works of our time.
+
+We are the lucky ones, who are privileged to step anywhere on our
+northern shore into a carriage, far more commodious than the ancient
+stage coach, compose ourselves for sleep, and allow ourselves to be
+whirled away, in order to find ourselves the following noon, seated at
+a comfortable meal on the heights of the Rigi. We have crossed the
+Atlantic Ocean in six days, we talk and listen to a friend, and it is
+nothing to us that he is a thousand kilometres distant. By pressing a
+button, we illuminate our house, by pulling a lever, we light up a
+whole town. From the birds we have purloined the art of flying, and
+many other wonders have the past fifty years showered upon us, and yet,
+all this is not the real monument of our time, but it is
+
+    "WORK!"
+
+That systematic work, which is sure of its own goal, is the origin of
+all the wonders of the past half century, and which has set its own
+seal upon the special character of our own time.
+
+If we consider the life of animals and even plants, we find that all
+adapt themselves to the demands of nature. This is the original
+primitive condition. But already the bird building its nest for greater
+comfort and protection of its young, interferes with nature's original
+conditions. No doubt, mankind once lived under primitive adaptation,
+and possibly the idealistic thought of paradise may be the echo of
+those far away days. When, however, mankind began to people the earth,
+necessity drove them to assist nature and thus "WORK" was created. For
+a long period this work was infinitesimal, and many races could still
+live from nature's storehouse. Their wants were few, so that the
+thought of exploiting nature for the benefit of improved conditions,
+never entered their heads. For forty years, Moses traversed the desert
+with the people of Israel, searching for gifts from Heaven, but they
+did not know, that--he who wishes to live upon milk and honey--must
+work to obtain them. By degrees, people began to try and win more from
+Dame Nature than she was willing to give unaided. They were forced,
+thereto, by their ever increasing numbers and by the individual demands
+on life. This healthy thought for improvement was frequently
+interrupted and, temporally, even entirely suspended, for in the human
+mind dwell not only great and lofty thoughts, but envy, strife and
+hatred have also a place. The history of mankind bristles with ugly
+deeds, wars, enslaving of nations and even extermination. Entire
+periods know nothing of peaceful development, but quietly and
+persistently "WORK" gained ground and forced itself, despite
+resistance, upon mankind. Only the more modern times have shown us the
+might and the blessing which lies dormant in "Work". Like an avalanche,
+the knowledge swept fifty years ago across the people, that quite
+different means were required for mutual benefit and culture, than
+those provided by nature itself. That was the triumphal entrance of
+"Work" towards a definite goal.
+
+Words fail to adequately describe what the last fifty years have
+brought us, in inventions and kindred achievements, and what is the
+result of this Herculean work? An expansion undreamt of in the annals
+of history. By 50% the population of several countries had increased,
+they became too small to feed and clothe their people from their own
+resources, but the new spirit, which dominated all, has solved this
+problem, and great blessings have been vouchsafed to humanity. The
+"hard at work" countries had much better food, clothing, health and
+enjoyment, and each individual shared in the vast improvement of the
+general conditions of life.
+
+What are the driving forces which put this gigantic machinery into
+motion? To enumerate them all would be impossible. The workman, who
+wields the hammer, the woman, who keeps home and hearth bright and
+cheerful, the patient teacher who moulds the juvenile mind, the
+professor, who disperses the deeper knowledge of science, the engineer,
+with his intricate machinery, the inventor, with his fertile brain,
+and, last not least the merchant, who constantly opens new roads for
+the interchange of goods, all--and every one of them are cogs in the
+wheels of the engines of progress.
+
+The laws and rules which govern this world of activity cannot be
+determined. Each single one of the co-workers has the purpose and goal
+of his own endeavour before his eyes, but the human mind is incapable
+of guiding or even viewing, the concentrated action of all the forces
+at work.
+
+We have given a cursory glance at the general economic development
+which started in the slowest possible way, and marched with double
+quick speed during the last fifty years, but now we shall turn to our
+own particular sphere.
+
+We celebrate, to-day, the fiftieth anniversary of the Establishment of
+the Bremen Cotton Exchange, and with this book of sketches and
+sidelights on what we have felt and experienced, we wish to contribute
+a small offering to this festivity.
+
+
+
+
+COTTON.
+
+
+Cotton grows in almost every part of the Globe where the climatic
+conditions are favorable. The plant requires a moderate amount of
+moisture, but a good deal of sunshine and also warm nights. Countries
+with a moist warm climate are suitable for the raising of particular
+good qualities.
+
+The chief country of production is the southern part of the United
+States of North America. Considerable crops are also grown in East
+India and Egypt, and lesser quantities come from the Caucasus,
+Turkestan, China, Brazil, Argentine, Peru and Africa. The continental
+consumption looks for the greater part to American cotton, but, also,
+East Indian is extensively used. In the Southern States of America, the
+first cotton ripens in August. The bolls containing cotton, will grow
+well into the Autumn, and even in Winter new bolls will be formed, and
+it is only a killing frost, which terminates the productive force of
+the plant. When the bolls are ripe, they open, and then the picking
+commences. As a rule, the first pickings are the best as to color and
+cleanness, and the longer the bolls are exposed to the inclemencies of
+the weather in Autumn and Winter, the more the quality will
+deteriorate. The picked cotton consists of two thirds of seed and one
+third of actual cotton. In order to obtain the fibre, the cotton is
+passed through a ginning machine. From the seeds, edible oil is gained
+and the residue is manufactured into food for cattle, while the cotton
+is formed into bales in specially constructed presses. It is natural,
+that cotton should show a great diversity of quality, owing to the
+influence of weather during the long period of picking. The color of
+cotton covers a fair range, one sees not only snow white and creamy
+cotton, but also bluish, grey, red and mixed colors.
+
+The value of cotton is determined by its quality and character. Of
+chief importance is the percentage of the loss during the cleaning
+process in the cotton mill. A normal percentage of loss for medium
+grades is 10%, this is likely to be higher, if the cotton has been
+picked during moist weather and contains much unripe cotton. The color
+is also of great importance, discolored cotton has a decidedly lower
+value, especially when this cannot be rectified by bleaching which is
+mainly the case with heavily spotted or bluish cotton. An even greater
+factor, than the outward appearance, is the inner value, which is
+represented by the length and strength of the fibre (staple). The
+staple length of common American cotton is from 24-28 mm. In great
+request are the qualities, which have a longer staple than 28 mm,
+especially when the staple is even, silky and strong. A difference of
+only 1/2 mm in the length of the staple, may mean a difference of 10%
+in the value. It is of the greatest importance to the cotton merchant
+as well as to the spinner, that the cotton is correctly judged as
+regards its outward appearance and the length of staple, this
+adjudication or classing is by no means an easy task. A certain system
+has been adopted by which the outward appearance of the cotton is fixed
+by so-called standards into classes. A certain number of cotton samples
+are arranged in a suitable flat box, in such a way that their surface
+represents the color and cleanness of the respective class. If a lot of
+cotton is to be classed, samples are drawn from every bale, these are
+placed together, sample by sample, and the total thus gained, is
+compared with the standard. In this way an opinion is formed, whether
+the cotton is equal to the class represented by the standard, or
+whether it is below it, in which case, this difference in class has to
+be valued. The judging of the staple is a very difficult task, 1/2 mm
+is of importance, and yet it is impossible to measure staple correctly.
+Anybody, even with the greatest dexterity in his fingers, will not be
+able to draw from a piece of cotton the single fibres, place them in
+such a way next to each other, that they appear like Swedish matches in
+a box. A good expert, however, is able to draw the staple in a manner,
+that the average length will be accurately judged. To give a correct
+opinion on cotton, rooms with a good light are required, much
+experience and good judgment.
+
+Next in importance for continental consumption is Egyptian and East
+Indian cotton. The former is divided into two kinds, the long stapled,
+which grows on the lower Nile, the Delta, and the shorter stapled,
+Upper Egyptian cotton. The long stapled Egyptian is utilised for the
+very finest yarns, and its only rival is or was Sea-Island cotton. This
+latter grows on a group of islands, not far from the shore of Georgia
+which have a moist warm climate, but the boll-weevil has played serious
+havoc with that crop, and the cultivation has been greatly curtailed.
+East India produces shorter stapled descriptions of great variety, but
+each has a character of its own, and yet to differentiate between them,
+is a knotty problem, especially, as now and then, one comes across a
+somewhat fraudulent mixture. The names are mostly derived from the
+locality in which they grow, while the climate and condition of the
+ground give the character, and in some cases, even distinctive smell,
+for instance, Oomra cotton smells like musk; occasionally the smell is
+an indisputable proof of origin.
+
+It has taken the continental cotton industry a long time to grow from
+small beginnings to its present importance. The never lacking
+competition has brought about a great improvement in the quality and
+variety of the articles produced. It is astounding to compare the raw
+material in the fields, with the finished articles in the windows of
+some lady's outfitting shop. It requires many diligent hands and high
+class technical guidance, to transfer Nature's present of raw cotton
+into the manifold articles, which the people, nowadays, require and
+desire.
+
+The variety of these articles is countless: cloth, as fine as a
+spider's web, and coarse fustian, here finest batiste, and there,
+strong drill for overalls. Each finished article requires its own
+particular raw material, low qualities cannot produce fine goods, and
+it is also impossible to utilise high qualities for low grade goods.
+The very arbitrary law for economic production, makes it a duty for
+every spinner to select just that quality of cotton, which is most
+suitable for his purpose, and it is the task of commerce to adapt the
+offers and deliveries to the requirements of the consumer.
+
+
+
+
+THE OLD TIME.
+
+
+In the year 186.., in the old narrow office, father and son met, the
+latter, a newly made partner. He had been, according to ancient custom,
+a volunteer for several years in London, where he had been well
+received amongst English families. But it was with strange feelings
+that he entered his father's office for the first time after many years
+of absence.
+
+His horizon had widened, while here, little or nothing was changed. The
+old office furniture, which had done good service for generations, was
+the same, as no merchant ever thought of altering anything for merely a
+greater personal comfort, but the old fashioned standup desks and the
+well worn leather seats of the high office stools, did not look as
+inviting as of old. His memory had mellowed and idealized their
+appearance. Of course, the influence of the mother was not permitted in
+the sacred precincts of the office, even most of the cleaning was done
+by the youngest apprentice. But from the grey walls looked down
+proudly, the models of the sailing vessels which carried their
+houseflag to distant shores. During the long hours of a voyage, they
+had been fashioned by captains or clever sailors, and were a constant
+reminder of deeds nobly done.
+
+Here is the "Anne Marie", a tea clipper of graceful lines, like a
+swallow, which made the journey from China to London in 80 days, and
+had earned, besides a good freight, a high premium for bringing the
+first tea of the new crop to the epicures in London. There is the
+"Katharina", much heavier in build, she took 180 days to fetch wet
+sugar and hemp from Manilla. One may wonder, whether captain and crew
+ever thought of the enjoyments of life, while they ploughed the sea for
+6 months. Yonder, in the full light from the window is the "Nordstern",
+a whaler, and underneath a picture of the crew. These wild and rough
+fellows took their lives in their hands, on the perilous journey from
+Honolulu to the Polar Seas. They had no regular wages, but shared in
+the profits from the sale of the oil and whalebone. Their hard earned
+money, however, was mostly dissipated in San Francisco, during a few
+days of riotous jubilation.
+
+After some desultory talking, the son carefully broached the following
+subject: "There is the "Augusta" ready in port to sail for Baltimore,
+to bring a cargo of tobacco. Pity, that the heavy Kentucky barrels fill
+only half the freight room and leave so much space empty. I think,
+father, we ought to fill it up with light goods, principally with
+cotton."
+
+"Cotton, my dear boy! I fancy, you must be dreaming of the old firm of
+B. & F. You remember, F. told his agent, in the West Indies, to add to
+the cargo of Asphalt and cocoanuts, 200 bales of cotton. His bad
+handwriting led to the mistake that 2000 bales were shipped, the moment
+they were afloat, the Southern Ports were blockaded, which caused an
+unprecedented rise in the price of cotton, so that the last of the 2000
+bales were sold at "one Thaler" per pound (equal then to three marks)."
+
+"I do not think, father, that such luck is likely to repeat itself, but
+the fact remains, that we have room empty, which easily might carry
+freight, besides, I hear, that there is an increasing demand for
+cotton, as several new cotton mills are being started in Germany."
+
+"Yes, that is all very well, but think of the enormous risk of the
+cotton trade. The fluctuations in prices are fabulous, recently, they
+have been going down and down. My friend W. has been holding cotton for
+3 years and has never seen his price back yet. A loss he will not take,
+he declares 'that he will hold that cotton till he is black in the
+face.'"
+
+"That is a wrong policy, W. ought to have sold the cotton long ago,
+replaced the same by a lower priced purchase, this would have saved him
+charges and loss of interest, and would have cheapened his original
+purchase."
+
+"This is a new method of doing business, we--old Bremen people--stick
+firmly to an enterprise, until the success is secured. That is the old
+Hanseatic spirit."
+
+"One might almost call it stubbornness, the present time requires quick
+thinking and turning."
+
+"All right, but from whom will you take the money which is required by
+this modern way of doing business? The local money-broker has no spare
+cash for it."
+
+"No, father, but I can assure you, that in London people are not
+adverse to assist the legitimate trade, and besides, several of the
+great London Bankers come from this neighbourhood and are very well
+disposed towards Bremen."
+
+                     *      *      *      *      *
+
+The "Augusta" brought, besides her cargo of tobacco, 1038 bales of
+cotton, quite a big quantity for that time.
+
+
+
+
+QUESTIONS OF LAW IN THE PAST.
+
+
+According to the Universal German Commercial Law, and later, according
+to the Civil Code of Law, the buyer has the right to cancel the
+contract, or to demand a reduction in price, if the goods delivered do
+not equal the quality guaranteed.
+
+Experts had to decide, whether the quality tendered was up to the
+guarantee.--These experts were appointed by the law, in accordance with
+the proposals of the parties concerned. The cotton trade followed, in
+olden days, this same procedure, but the weak point, was the verdict of
+the experts, because there were no experts in Germany outside Bremen,
+and no party could forecast the likely result of the verdict. A far
+worse consequence of the Law Conditions was for the cotton trade, the
+fact, that the law made no difference, whether the goods differed much
+or little from the stipulated quality. In both cases, the buyer had the
+right to place the goods at the disposal of the seller. The result of
+this, was most damaging to the Trade, sometimes, the sellers had the
+worst of it, sometimes the buyers. A few examples taken from actual
+experience will best explain this:
+
+    Extracts from business letters of past years.
+
+    We have received to-day your 100 bales of cotton, but find the
+    quality not up to our expectations. You have to deliver us
+    middlingfair, but the cotton is hardly goodmiddling. We cannot use
+    the cotton, as it is unsuitable for our hosiery yarns. We place the
+    100 bales at your disposal.
+
+                     *      *      *      *      *
+
+    We insist upon your taking delivery of the 100 bales. The quality
+    is perfectly correct, you can ask any expert in Bremen about it.
+
+                     *      *      *      *      *
+
+    We have nothing to do with your Bremen Experts, if need be, our
+    local experts will decide. We have no doubt that you know the law
+    on this point. The fact remains, that we place the 100 bales at
+    your disposal.
+
+                     *      *      *      *      *
+
+    Your intention to place the 100 bales at our disposal is caused, no
+    doubt, by the fall in prices. We know very well that if it comes to
+    law, experts will decide, who know nothing about it, moreover, the
+    verdict will only be given after many months. This is unbearable;
+    what allowances do you want?
+
+                     *      *      *      *      *
+
+    If you wish us to use the cotton, we demand an allowance of....
+
+                     *      *      *      *      *
+
+    Your demand is preposterous, but we have to agree to it, as we
+    cannot help ourselves. We prefer not to make you any offers in
+    future.
+
+                     *      *      *      *      *
+
+    I am sorry to inform you, that the 100 bales are not equal to the
+    sample, consequently, I place the cotton at your disposal.
+
+                     *      *      *      *      *
+
+    The buying sample has been taken from the actual bales delivered, a
+    difference in the quality is quite impossible. We insist upon your
+    keeping the 100 bales.
+
+                     *      *      *      *      *
+
+    I am sending you a few samples of the delivered cotton, any child
+    can see that they are different from the buying sample.
+
+                     *      *      *      *      *
+
+    The samples sent to us are of no account. 100 bales represent a big
+    quantity of cotton, amongst which, a few inferior flakes are sure
+    to be found, if one searches diligently for them. We cannot agree
+    to your demands.
+
+                     *      *      *      *      *
+
+    My lawyer tells me, that every bale and every part of the bales
+    must be equal to the sample. I have opened several bales and find
+    the contents very irregular. There are good and bad flakes in them,
+    I can only use regular cotton. The 100 bales are at your disposal.
+
+                     *      *      *      *      *
+
+    Your 100 bales turn out very badly indeed and are much below the
+    guaranteed quality. What allowance are you willing to make us?
+
+                     *      *      *      *      *
+
+    There can be no question of an allowance, if the 100 bales do not
+    suit you, why do you not place them at our disposal, as you did in
+    a previous case. This time, however, prices have advanced, while
+    last time, they had fallen, now perhaps the case will appear to you
+    in a different light.
+
+                     *      *      *      *      *
+
+    You surely never expect me to take bad cotton instead of good? I
+    cannot return the cotton, as I cannot stop my mill. I propose, that
+    experts fix the lower value, and you pay me the difference
+    according to law.
+
+                     *      *      *      *      *
+
+    If you wish to invoke the law, you must remember, that the cotton
+    is not allowed to be touched, till the experts have made their
+    report and the legal verdict has been given. You say, "you must use
+    the cotton at once," while our agent tells us, "that a few bales
+    have already been spun." This finishes your claim, and we refuse to
+    do anything in the matter.
+
+                     *      *      *      *      *
+
+    A spinner bought direct from America 100 bales of a certain class.
+    The market rose rapidly, and when the bales arrived, they were much
+    inferior, in fact, fully two classes too low. The spinner
+    complained bitterly to the shipper, and demanded an allowance,
+    which the latter refused, on the plea, that, for the price of the
+    contract, he could only deliver low quality.
+
+                     *      *      *      *      *
+
+From these examples it will be seen that the cotton Trade had no
+suitable foundation in the Law.
+
+
+
+
+ORIGIN OF THE BREMEN COTTON EXCHANGE.
+
+
+During the war of 1870/71 the cotton trade had suffered a serious
+relapse, but shortly afterwards, the Bremen people began seriously to
+consider means and ways to put the trade on a proper footing.
+
+The industry had expanded, and the occasional chance business had been
+replaced by a more regular and closer connection with the spinners. The
+main thing to do now, was to find a proper basis upon which a regular
+market could be built up. The various questions of law had to be
+adjusted in a broad minded manner, to suit the particular need of the
+cotton market. Liverpool offered a good example for this, as there,
+everything had been adapted to the peculiarities of the cotton trade.
+
+Here, in Bremen, first of all, the credit system had to be abolished.
+It was manifestly impossible to increase the import, as long as the
+importer was obliged to sell the cotton on 3-4 months open credit.
+
+A good stock of cotton is the first necessity for a market of any
+importance, but how to obtain it, if the needful capital is lacking to
+pay for the cotton? The risk of the great price fluctuations, which are
+indigenous to cotton, gave the whole trade a bad name, and everybody,
+who had anything to do with it, lost prestige.
+
+Was it worth while to follow up the idea of starting a cotton market?
+
+We must praise the men, who made it practically their life's work, to
+overcome the difficulties, and must admire the cleverness with which
+they left certain items for the future to solve.
+
+The men who laboured hard for this object, formed themselves into the
+"Committee for the Bremen Cotton Trade", later on, the name was
+changed, and on the 1st of October 1872, everything was ready, and
+under the new name of
+
+    "Bremer Baumwollboerse"
+
+an organisation was started, which has since become known all over the
+cotton world.
+
+On the 1st of October 1922, its birthday re-occurs for the fiftieth
+time.
+
+Political occurrences make a deeper impression than those which fall
+into the sphere of National Economics, but the present has taught us,
+that the latter are by no means to be despised, in fact, deserve more
+attention than was given to them previously. It may be worth while to
+recall, that through the influence of the "Bremen Cotton Exchange", a
+well regulated trade of first magnitude has been built up. We are
+forced to observe the development of national economy, not only in our
+own country, but also, that in foreign countries, and by keeping the
+important factors constantly before us, we can learn a good deal.
+
+
+
+
+ARBITRATIONS AND APPEALS.
+
+
+The department of the "Bremen Cotton Exchange" which deals with
+questions relating to actual cotton, has a staff of sworn classers. It
+is their duty to fix, with the aid of the various standards, the class
+of cotton, or to pronounce an opinion on it, or to settle the disputes
+between buyer and seller, as far as they refer to the quality of
+cotton.
+
+American cotton is divided into a number of classes, and each has its
+standard. Originally, these standards were obtained from Liverpool, but
+later on, Bremen produced the standards independently. There are
+original standards and standard copies; the former, remain unchanged,
+while the latter are renewed every year, because, through constant use,
+they are liable to deteriorate. The freshly made up standards are
+subject to the examination and approval of a Committee, elected for
+that purpose, and which consists of Members of the Trade and the
+Industry. The sworn classers are nominated by the directors, and
+concern themselves solely with the classing and arbitrating of cotton.
+They have sworn a solemn oath, to conduct their office with absolute
+impartiality; this is further safeguarded by the fact, that the names
+of the parties interested are kept strictly secret. If a party
+consider, that they have a right to complain about the verdict of the
+classers, they can appeal against the decision. The verdict of the
+appeal is given by Appeal Judges, who are appointed by a Committee,
+elected for that purpose. They are selected from the merchants and
+spinners, and great care is exercised that they possess the necessary
+expert knowledge. The names of the interested parties are also withheld
+from the appeal judges, nor are they informed whether buyer or seller
+have appealed. It is of great advantage to the whole arbitration
+system, that the appeal judges are actively engaged in the cotton
+business, by this means a bureaucratic verdict is avoided. Up to a
+point, the arbitrators and appeal judges work together, and thereby,
+the former remain in close touch with the general business life, which
+is of importance for various reasons. It is not sufficient for a
+correct verdict, to simply compare the cotton with the standards, the
+judges must know, how the difference in the quality is to be valued;
+and how far the character of each crop is to be taken into
+consideration, etc. etc. It is therefore apparent, that the judging of
+cotton requires a certain connection with the actual business activity,
+and, it is certain, that only the commerce itself can produce and
+educate the individuals, who are chosen to pronounce an expert opinion
+upon questions of such importance and difficulty.
+
+                     *      *      *      *      *
+
+The "Bremen Cotton Exchange" does not only decide questions concerning
+quality, but settles also all other disputes, which may arise between
+members. These decisions are given by, what may be called, a court of
+arbitration and a court of appeal. To the former each party appoints
+its own expert, while the Exchange appoints the experts to the latter.
+The conditions of the "Bremen Cotton Exchange" are adapted to the
+common law, but take into account, the decided peculiarities of the
+cotton trade.
+
+The following is an explanation of an important point, where the
+conditions differ from the Common Law. A deviation from the guaranteed
+quality, does not give the buyer the right to cancel the contract. He
+is awarded an allowance, when the difference is small; if the
+inferiority be greater, penalty is added to the allowance, but, when a
+heavy allowance is not likely to compensate the buyer for the damage
+sustained, he may return the cotton, but not by cancelling the
+contract. In such cases, the contract will be what is called,
+"regulated" or "invoiced back", in which method, the market differences
+are duly taken into account, with the addition of penalty for the
+guilty party. When sales are made for specified deliveries, and these
+should not be made within the proper time, the buyer has also the right
+of invoicing back, in the manner described. This invoicing back, takes
+the place of the cancelling of a contract, according to law.
+
+It is possible, that when a party practically goes by default on a
+contract, through a very inferior tender, or by a late delivery, they
+may yet be entitled to claim from the other party, a difference in
+price. For instance: Somebody sells cotton at 22 cents, the market
+drops to 20 cents, the contract is invoiced back for bad delivery,
+then, the seller, who is the guilty party, has a claim against the
+buyer, for a difference in the market of 2 cents less penalty of 2% =
+0.44 cents, equalling 1.56 cents net.
+
+This claim would not be possible according to Common Law. The
+conditions of the "Bremen Cotton Exchange" make it a principal, that no
+party shall take an advantage of the market fluctuations.
+
+In the above case, the buyer would have a profit of 2 cents, if he
+could have simply cancelled the contract on account of bad delivery,
+because he could have immediately re-bought the cotton at 20 cents,
+while all his calculations were based on a purchase at 22 cents. This
+apparently strange fact, that the innocent should pay to the guilty, is
+the direct consequence of the elimination of market fluctuations from
+the Law Codes.
+
+It has been of great benefit to all concerned, that any differences of
+opinions are promptly settled by the "Bremen Cotton Exchange", and not
+by having resort to a costly and wearisome law suit. Everybody in
+cotton knows, that quarreling is always bad business, and, it is with
+some pride, that the cotton Exchange looks back upon the big number of
+decisions given.
+
+Only very rarely has it happened, that disputes have been referred to
+the ordinary Law Courts. The "Bremen Cotton Exchange" has, according to
+the Rules, the power to do so, but that right is only exercised, where
+purely matters of Law are concerned.
+
+
+
+
+THE UNION WITH THE INDUSTRY.
+
+
+The Bremen Cotton Market made slow progress and now and then the
+progressive movement was interrupted. It required courage to pursue the
+projected course, but "never despair" was the motto which finally
+carried the day. It became apparent, that the "weal or woe", of the
+market depended upon the attitude of the Industry. Far sighted men
+strove hard to awaken an interest for Bremen amongst the spinners, who
+still utilised considerably the Liverpool market.
+
+The following letters bear witness how this idea was received:
+
+    Bremen, ... 1886.
+
+    The time has arrived, when the South German Cotton Industry should
+    decide to come a step nearer to the sea. Frequently, complaints
+    have been made about mutual misunderstandings, and that this lack
+    of understanding had given rise to friction. If the spinners would
+    unite with the Bremen cotton trade, an opportunity would be created
+    for eliminating these misunderstandings. By talking matters over in
+    a friendly spirit, and becoming known to each other, common
+    interests could be defended and furthered. There is no danger that
+    the spinners might be outvoted in Bremen, for there is a strong
+    feeling here, that the common welfare must predominate, and that
+    the Bremen trade depends, to a large extent, upon the goodwill of
+    the Industry.
+
+                     *      *      *      *      *
+
+    Augsburg, ... 1886.
+
+    We note with pleasure the suggestions, which we received from you
+    verbally, and by letter, and are convinced that the reasons which
+    you advance for a union with your market, are perfectly correct.
+    Many of our spinners are a little out of the world, and it would be
+    of advantage to them, to come into closer touch with the foreign
+    and oversea trade. We shall gladly come to Bremen, after the
+    necessary arrangements have been made in Augsburg. We do not wish
+    to be merely affiliated, but desire to become active workers; for
+    this purpose, we should require full membership, with voting power.
+    We shall take care that Bremen--as a German Sea Port--attains the
+    position in the cotton World, which it deserves.
+
+                     *      *      *      *      *
+
+In July 1886, the entry of the German Spinners into the "Bremen Cotton
+Exchange" became an accomplished fact. The arrangements, which the
+trade had made, for dealing with the cotton business in a just and
+fitting manner, were pronounced excellent. It was resolved with great
+enthusiasm, to unite forces for the fostering and regulating of the
+cotton Import Trade, thereby, creating for Bremen, a great Cotton
+market, and for the spinners, an easier way of obtaining their raw
+material.
+
+Six spinners joined the Board of Directors of the "Bremen Cotton
+Exchange".
+
+The German Spinners Unions were now united with the Bremen Cotton
+Exchange, but, in the course of time, Swiss and Austria-Hungarian
+spinners followed suit. Through this fusion, "The Bremen Cotton
+Exchange" gained greatly in importance, influence and business
+activity, so that it stood on equal terms with the great foreign
+Exchanges.
+
+At many meetings, spinners and merchants have peacefully sat at the
+same Board table, although the interests of both groups are frequently
+opposed to each other. Now and then, this has been apparent, but on the
+principle that good reasons must give way to better ones, differences
+of opinions were settled after proper discussion. Mutual understanding
+and a determination to pay due respect to the interests of the other
+party, have always been the leading spirit of the meetings. To-day, it
+stands beyond any doubt that through this fusion, great benefits have
+accrued to both parties, and to the far sighted men, who brought this
+about, great honor, praise and veneration are due.
+
+In the following we give a few figures concerning the number of Members
+and the activity of the Bremen Cotton Exchange:
+
+    Year    Members   Arbitrations        Appeals
+
+    1887      184      300 446 bales    29 642 bales
+    1892      253      653 567   "      70 340   "
+    1897      356    1 089 956   "      67 048   "
+    1902      449    1 295 441   "      63 692   "
+    1907      673    2 396 128   "     208 402   "
+    1912      717    2 554 284   "     315 597   "
+    1913      719    2 165 657   "     245 576   "
+    1920      610      405 058   "      80 698   "
+    1921      663    1 041 608   "     215 066   "
+
+We cannot possibly conclude this chapter, without drawing attention to
+the fact, that if the commerce has reached its present greatness by its
+own endeavours, the industry is fully entitled to an equal share of
+praise.
+
+The German cotton industry had to pass through many a hard fight. There
+was a time, when German goods were deemed inferior, mainly for the
+reason that they were not known. The German Export Trade owes something
+like an apology to the Industry, for the poor support it gave at first
+to the exertions of the Manufacturers, to create a market for their
+goods in foreign countries. It took a long time before German goods
+were appreciated in foreign markets, but, eventually, they gained for
+themselves a high class reputation. The "Bremen Cotton Exchange", views
+with pride, the success of their fellow members of the Industry.
+
+
+
+
+FINANCIAL ITEMS.
+
+
+In those days, when the world spoke of the five "Great Powers", money
+was called the sixth "Great Power" and that with full right. It is a
+fact, that money means power, and that in a wider sense of the word
+than is generally accepted. The power of a state is limited, the power
+of money is unlimited, it is international. It seems ever to rejuvenate
+and augment itself, and it constantly draws bigger multitudes under its
+sway. A man who is a power in financial circles, plays his role in the
+world. England owes its enormous influence in politics and national
+economy to money. There have been other countries possessing great
+riches, but the working, creating and ruling capital, was English.
+
+Previous to the English, German tribes were known on the sea. Daring
+mariners left our shores, and did a thriving business in all parts of
+the adjoining seas, where they founded settlements in the northern
+waters, and on the Baltic. How is it, that Germany has not gained
+riches, and why has it not participated in the treasures of the world,
+which, up to a few hundred years ago, were lying open to everybody? For
+the most part the unfavorable geographical position is to blame. On all
+sides, hemmed in by foreign countries, it had to suffer wars upon wars.
+A hundred years ago, Germany might still have had a chance to gain for
+itself a position in the world, but, at that time, it was lying in the
+dust, bleeding from a thousand wounds. The wars, which Napoleon waged
+against the German states, had reduced it to a poverty stricken
+country. All stamina seemed to have disappeared through the Napoleonic
+reign, the wars themselves and the contributions to the same, which the
+enemy mercilessly exacted, brought about a condition, which stifled all
+enterprise, and reduced the people to misery. Deep thought, poetry and
+music had to take the place of bodily welfare.
+
+In their poverty, the inhabitants could not grasp the advantages
+offered to other nations. Under these conditions, England gained the
+mastery over half of the globe, politically, and in an economic sense.
+The colonies provided vast supplies, which were cleverly exploited,
+riches increased, business relations with the European Continent were
+opened and enlarged, and one fine day, England was the general provider
+to the Continent for nearly everything required. The extension of Trade
+was closely followed by the development of the Banking system, which,
+after all, may be called a branch of the trade. In the colonies,
+English banks were established, and every ton of rice or grain, every
+pound of cotton or spice, had to be paid through the intermediary of
+the banker, who, of course, derived a profit from the transactions.
+
+When 50 years ago, Germany awakened from its long impotence, her
+citizens were received, without prejudice, all over the world, and no
+obstacles were placed in the way of their diligence. This fact, we wish
+gladly and thankfully to record. Many Germans were successful in
+gaining a firm footing in the English Colonies, as well as in America,
+and to attain there important positions. They formed a link between
+their home country and the centres of trade and finance. Valuable
+services were rendered by them to the German trade, but London remained
+the Banker of the world, and when an industry began to grow in Germany,
+it was, in many cases, the English, who furnished the first capital.
+When the cotton market started to develop in Bremen, most of the
+financing was done by English bankers, anyhow at first. Later on,
+German Banks participated, and it is greatly to their credit, that they
+showed such great interest and understanding for the requirements of
+that trade. In the year 1871, the first German Bank of importance
+opened its doors in Bremen, and others followed, as the trade expanded.
+
+The cotton trade remained, in a certain measure, true to the English
+banks, while the other branches of commerce worked mostly through
+German banks, and a great incentive was given to this, by the fact,
+that American bankers considered German money equal to the American and
+English values.
+
+How do we pay for the cotton, which we import?
+
+The planter receives the purchase price from the shipper, through any
+one of the numerous banks in the South. Of course, we cannot give the
+actual dollars to the shipper, consequently, he or his banker has to
+advance them for a short period. Before the war, we opened a credit
+with English or German banks, in favor of the shipper, a so-called
+reimbursement credit, by which he could recover his advanced purchase
+price. When opening this credit, we took care, however, to have proof
+that the goods, for which we intended to pay, were certain to reach us
+eventually. We made the condition, that, against the reimbursement
+credit, the shipping documents were to be delivered. Against delivery
+of these documents, the shipper drew a draft upon our bankers,
+discounted the same, and the matter was settled. Now the bank was in
+possession of the documents, and by accepting the draft, had guaranteed
+to pay the purchase price. The position between the bank and ourselves,
+was cleared in various ways, which depended upon private arrangements.
+We, as cotton importers, had to receive the purchase price from the
+consumer in the interior, before we could satisfy our bank. As the sale
+of the goods could not always be effected promptly, we remained debtors
+to the bankers for the purchase price, while they were in possession of
+the goods or the documents. The settlement of transactions of this
+kind, requires a certain amount of trust and confidence, which the
+bankers have to grant to the merchants, on the other hand, they have
+their security in the value of the goods in their keep. The banks have
+always given a full measure of trust to the Bremen cotton trade, while
+the commerce has made every arrangement to safeguard the interests of
+the bankers. In this connection, we mention the establishment of the
+"Bremer Lagerhaus-Gesellschaft" which was founded in 1877, through
+their Agency the bank obtained, in a simple form, the security of the
+cotton itself. The hypothecation of goods against an overdraft on the
+bank, was new in those days, but later, it became common practice, and
+the old established forwarding houses made similar arrangements to
+those of the Bremer Lagerhaus-Gesellschaft. It became the custom to
+issue warrants against the cotton stored. The warehouse owners were,
+thereby, obliged to keep the cotton, until the holder of the warrant
+gave it free.
+
+With growing trade, the co-operation of the banks increased
+considerably, and for a long period, business was satisfactorily
+settled, but the war caused here, like everywhere else, a certain
+amount of confusion. The settlement with the German banks was easy, but
+it was impossible, during the long period of the war, to let that
+cotton remain untouched, which was hypothecated in favor of foreign
+banks. Thus, a peculiar position in law was created, between the
+warrant holder and the previous owners of the cotton. The settlement of
+these questions lies with the respective committees of the peace
+commission.
+
+The financial treatment of the import business after the war, is vastly
+different from previous methods. The American bankers play a far more
+prominent part, as the German importer pays in dollars on arrival of
+the goods in port, and he has to buy the dollars at a rate of exchange,
+which is subject to the vagaries of the Stock Exchange.--Recently a
+moderate credit has been given to the importer, but the further
+development of affairs is uncertain.
+
+
+
+
+BUSINESS IN FUTURES.
+
+
+Cotton is sold to a large extent for distant delivery, but "future"
+transactions are only those which are concluded on a specified "future"
+exchange, under the rules and regulations of that particular exchange.
+Here be it mentioned, that the Bremen Cotton Exchange is no exchange
+within the meaning of the law. It has no regular hours of attendance,
+nor has it special rules regulating the business in "futures". The
+important "future" exchanges are Liverpool and New-York, and in a
+lesser degree, Havre, Alexandria and New Orleans. Within the specified
+hours of the "future" markets, large quantities of cotton contracts
+change hands. There, buyers and sellers are constantly in attendance,
+and it requires only a nod of the head to conclude a contract for
+thousands of bales. The Rules, referring to "futures", do not differ
+essentially from those governing the general trade, for it must be
+borne in mind, that all "future" contracts demand the delivery of
+actual cotton. Nobody can escape this duty, if he has sold futures, he
+must deliver, unless he buys the contract back before it falls due, or
+vice versa, which, of course, refers also to any ordinary delivery
+contract. In fact, all transactions for delivery are settled either by
+previous transfer or by fulfilment. It is noticeable how the stocks in
+New-York increase or decline, in accordance with the tenders, against
+"futures". No doubt, the great majority of the dealers intend to close
+their contracts before they fall due, and the opportunity to do this,
+presents itself every minute. In this, the "future" markets offer a
+great advantage, or, if you like, a great temptation. In former days,
+the dealing in "futures" had no legal protection in Germany, and
+nowadays only under certain assumptions. Dealing in futures came within
+the gaming act, and claims arising therefrom, were not actionable. The
+Bremen Cotton Exchange has never accepted this view, but has constantly
+fought against it, for very good reasons. The following explanation
+will make it clear, that, as far as cotton is concerned, the trading in
+futures is of great economic importance, and not practised for
+snatching easily earned profits.
+
+
+
+
+HEDGES.
+
+
+A great market has the duty to adapt itself to all the requirements of
+the Trade, and these are ever changing. For instance, new districts are
+opened for commercial enterprise, new methods of doing business
+develop, bringing increased activity in their train, and all this, has
+to be regulated or arranged for.
+
+Many things did not bother us in the past, as the following few
+questions will show:
+
+    How can we, without risk of the market, sell cotton in Spring,
+    which will only be grown in Autumn?
+
+    How can a planter sell the cotton which he has picked, when there
+    are no buyers at the moment?
+
+    How can a manufacturer protect himself against a decline in the
+    price of cotton, while his goods are being prepared for the market?
+
+    How can a manufacturer accept orders for late deliveries, without
+    possessing the cotton?
+
+    How can an importer take advantage of the great quantity of offers,
+    which flood the market, during the first few months of the
+    gathering of the crop?
+
+To anybody in the cotton trade, these questions present no difficulties,
+but, for the outside world, be it mentioned, that it is the "future"
+market that furnishes the means to overcome these apparent anomalies.
+It is the "future" contract, which eliminates the risk of the market
+from the carefully managed cotton business.
+
+Anybody who sells new crop cotton, buys a "future" contract as
+provisional cover, it is then immaterial to him, whether the market
+advances or declines. His actual sale price is the stipulated price,
+and the differences which arise from the "future" contract, are added
+or deducted. A planter, who cannot sell his cotton for the moment,
+sells the equivalent amount of "futures". A bank takes charge of the
+cotton and the "future" contract, and pays the price of the day. When
+the cotton is finally sold, the bank is reimbursed by receiving the
+then existing price of the day: plus or minus the differences on the
+"future" contract.
+
+A spinner finds himself, now and then, in the position that he cannot
+effect sales against his production. With a decline in prices, mostly,
+the cessation of the demand coincides. By selling a "future" contract,
+he can safeguard himself. When the demand is brisk, a spinner may find
+himself obliged to book orders, although the time for buying the raw
+material is not propitious. Here also, the "futures" give the necessary
+assistance.
+
+The receipts of cotton are naturally biggest in the first few months of
+the new season. Should an importer miss this opportunity of acquiring
+most desirable cotton? No, he can buy, with impunity, as much cotton as
+he considers advisable, for against each purchase, he can put out a
+provisional sale of "futures". In the cotton trade therefore, two
+transactions are frequently coupled. The main transaction, is the
+trading in the actual article, while the accompanying "futures", are a
+safety measure against the fluctuations of the market. This combination
+of actual cotton and "futures", is called a "Hedge"--the origin of this
+name is obscure. The "hedge" is a peculiarity of the cotton trade, it
+may even be called, its life condition. The supreme Court of Law has,
+in many decisions, upheld this condition. The endeavours of the cotton
+trade have always been directed towards the minimising of the market
+risk, and for this reason, "futures" have always played an important
+part in cotton business.
+
+What are the forces which put life into the "future" market? The
+world's trade is large, and every minute will find people, who, in the
+pursuance of legitimate interests, buy or sell. When both groups are
+fairly equal, the market is steady, while a decline or an advance is
+caused by a preponderance of one over the other; finally, this adjusts
+itself again, by the fact, that a rapid advance will produce sellers
+and vice versa. A further element in the market, is the "jobber", whose
+main object is to take advantage of the small fluctuation caused by
+chance, but we must not forget the big speculators. By these, we do not
+mean those despicable people who aim to snatch a profit, and who, on
+having to face a loss, plead the gaming act. Experience and force of
+circumstances have, luckily, driven these parasites almost out of the
+market. But we do mean those big operators, who having weighed
+carefully "the pros and cons" of the situation, cause the great "bull"
+or bear movements.
+
+
+
+
+TECHNICALITIES.
+
+
+For those who wish to obtain information concerning the cotton trade
+from this pamphlet, certain subjects are here elaborated, which were,
+so far, only indicated in connection with other explanations.
+
+Of first importance are the shipping documents, which consist of bills
+of lading and insurance certificates. There are three kinds of bills of
+lading: Port Bills of Lading, Custody Bills of Lading, and Through
+Bills of Lading. The first must be signed by the captain of the
+steamer, who has undertaken to carry the goods, or by a duly authorized
+shipping agent. They are, therefore, an absolute guarantee on the part
+of the ship, to deliver the goods to the holder of the bill of lading.
+Unfortunately, this obligation is frequently restricted by the
+insertion of certain inconspicuous clauses. The "custody bills of
+lading" are signed by a shipping agent, they acknowledge receipt of the
+goods, and promise the forwarding in due course. In order to obtain
+equal value with the "port bill of lading," they should, later on, be
+supplemented by a so-called "master's receipt", which is an
+acknowledgment by the captain, that he has actually accepted the goods
+for forwarding, in accordance with the conditions of the custody bill
+of lading. They are used when the goods have arrived at the port,
+previous to the ship.
+
+The "through or railway" bills of lading, oblige the railway companies
+to forward the goods from a place in the interior of America, to their
+destination. A master's receipt is not necessary, but desirable, as it
+is an easy means of ascertaining by which steamer the goods are coming
+forward. At one time, "through or railway bills of lading" were not a
+properly valid document, as the railway companies were not in duty
+bound to forward the goods. Now, however, a change in the American Law
+binds the companies to this duty.
+
+The "Insurance certificate" confirms, that the goods have been insured
+on the terms of an insurance policy, which remains in America, and in
+case of claims, it has the same documentary value as the policy itself.
+When "total loss", "general average" or "particular average" occur,
+claims on the insurer can be made, which must be substantiated in the
+port of discharge.
+
+Any claim, referring to difference in quality or loss in weight, has to
+be made on receiving the goods, and the complaint has to be lodged
+within a certain specified time. On these points, the Bremen Cotton
+Exchange has specific rules which are easily understood.
+
+If one party to a purchase or sale contract goes by default, the other
+party is obliged to send in their claim within the time stipulated by
+the rules of the Bremen Cotton Exchange, this is most important, as the
+non-observance may mean the loss of any right to claim. The method in
+which these claims are made up, is easily seen from the Rules of the
+Bremen Cotton Exchange.
+
+If one party suspends payment, all unfulfilled contracts are
+immediately settled, without any action of the other party. The
+obligation to take or make delivery ceases, and, instead of this, the
+difference in price is fixed which exists between the date of contract,
+and the time when payment was suspended. These differences in price are
+put to account between the parties concerned. It can thus easily
+happen, that the solvent concern has to pay a considerable amount to
+the other party, through whose fault the contract was not carried out,
+and yet, this constitutes no loss to the paying party, as they can at
+once cover themselves at the existing prices. The advantage of this
+procedure lies in the fact, that the solvent concern is not left in
+uncertainty, whether their contracts will be fulfilled or not, while,
+otherwise, this decision would rest with the liquidators, who,
+according to Common Law, are not obliged to declare themselves, until
+the stipulated time for delivery has been reached.
+
+Of great importance in the cotton trade is the business for future
+delivery, and that in a two-fold form. All transactions in "futures"
+are governed by the stringent rules of the respective Exchanges, which
+refer, particularly, to the price differences caused by the
+fluctuations in the market, and the safeguarding of the interests thus
+created.
+
+Indirectly, every buyer comes frequently into contact with the "future"
+business, because, for years past, the importing of cotton has not been
+done at fixed prices, but at so many points "on" or "off" certain
+"futures" in New-York, for instance, a purchase is made of "goodmiddling"
+October/November shipment at 200 points "on" December, or lowmiddling
+at 200 points "off". At any period up to the time of shipment, or even
+of arrival of the cotton, the buyer can elect to fix the price on the
+market of the following day. Should then December in New-York stand at
+20 cents, the price for "goodmiddling" would be 22 cents or 18 cents
+for "lowmiddling".
+
+Very peculiar is the "hedge" business, to which reference has been
+made, and it might be advisable to give a few examples as an
+explanation.
+
+A spinner is obliged to buy cotton to prevent stoppage of his mill, a
+sale of yarn is impossible for the moment and he decides on a "hedge"
+transaction. He buys "goodmiddling" at 22 cents, and sells at the same
+time in New-York 200 December "futures" at 20 cents. Later on, the
+market advances to 22 cents, and at this price the spinner covers his
+"future" contract, thereby, losing 2 cents. The purchase price of his
+200 bales is now not 22 but 24 cents. As the movements of cotton and
+cotton products run on parallel lines, he has the same chance, for the
+sale of his production, on the basis of 24 cents, as he had at 22
+cents. He gained a longer period to effect a favorable sale, while the
+chances of the market remained the same. It would have made no
+difference had the market declined to 18 cents, with a consequent gain
+of 2 cents, instead of a loss of 2 cents. The cotton would then have
+cost 20 cents, but this would have been no advantage to him, as the
+opportunity for selling his yarns would also have been on the basis of
+20 cents.
+
+A spinner sells his yarns for a distant delivery, at that moment,
+however, it does not suit him to buy the cotton, he prefers to cover
+himself in futures, and therefore buys 200 bales December "futures" in
+New-York at 20 cents. He has calculated that the sale price of his
+yarns allows him to pay 24 cents for goodmiddling. He watches the
+market for a favorable opportunity to buy "goodmiddling", he succeeds
+in buying 200 bales at 300 "on" December. On arrival of the 200 bales,
+he fixes the price with his seller, now he must be careful to liquidate
+his "future" contract at the same moment. Both are done at 18 cents,
+and he loses 2 cents on his "futures". The cotton, however, costs him
+18 cents, plus the 300 points "on", equal to 21 cents, he therefore
+makes a profit of 3 cents on the calculated purchase price of 24 cents,
+from this are to be deducted, the 2 cents loss on the "futures",
+remaining, one cent net profit. The fluctuations of the market had
+nothing to do with this profit, which he had, so to say, in his pocket
+right from the commencement, as he had sold his yarns on the basis of
+24 cents for cotton, with "futures" at 20 cents, in fact, he bought his
+cotton at 300 "on" for goodmiddling, with the value of "futures" at 20
+cents, which equals 23 cents. The hedge business, therefore, does away
+with the market risk, now in what consists its value? The profit on
+cotton does not lie in the fluctuations of the market, one has to look
+for it elsewhere. The chances of profit-making are to be found for the
+merchant in judicious buying, while, for the manufacturer, they consist
+in the lucrative production of his finished articles.
+
+The merchant requires for advantageous buying, far reaching connections
+and a wide spread organisation, he has to survey the entire field of
+cotton production, he must watch for every opportunity where cotton is
+pressed for sale, he must know which district has grown the qualities
+mostly preferred, in short, he has to keep himself extremely well
+posted. The consumer has to work with the same tension, to find the
+devious ways which lead to a profitable result in his business. Hardly
+ever do big profits stare one in the face, and should a particular good
+opportunity arise, it never lasts long, as everybody wishes to
+participate in it, which, of course, spoils the best chance. For the
+common welfare, competition tends to reduce the prices of everything to
+the lowest possible level, that is the natural course of events.
+Occasional deviations are simply exceptions, that, according to the old
+proverb: "prove the rule".
+
+What is the technical value of a market?
+
+The most pressing requirement for a spinner is a big supply, and this,
+naturally, collects in a big market. The manifold demands which a
+spinner places upon the quality, can only be satisfied by a great
+selection. Given a good supply, one of the main conditions of the
+industry has been fulfilled. An active market has a further calling, it
+regulates the prices, and, thereby, enables the industry to buy the raw
+material at a figure, warranting a successful competition in the trade
+of the world.
+
+
+
+
+MARKET ACTIVITY IN BREMEN.
+
+
+Future transactions, of course, entail certain expenses, which
+constitute something of a burden on the running business, while economy
+is a necessity for every mercantile enterprise. Out of this, originated
+the desire to establish a "future" market in Bremen. People felt sure
+that it would greatly assist the development of the market, to be able
+to trade in "futures" within their own portals. A certain amount of
+ambition may also have lent its weight. The establishment took place,
+though, not under the auspices of the Bremen Cotton Exchange, but in
+the form of an independent society. Early in 1914, the market commenced
+its activities, and it was soon found, that all expectations were
+realised, and even surpassed. The clearing house, which was started
+simultaneously, fulfilled all requirements. The business with the
+spinners had now a foundation, which answered all demands of modern
+times. Covering transactions, which previously were cabled to New-York
+and Liverpool, could be executed here every minute within business
+hours. Where orders from spinners were concerned, the whole transaction
+could be done by telephone. The "future" market blossomed out in such a
+way, that no fears were entertained for its successful future.
+
+The coping stone had been set on the edifice of the Bremen Cotton
+Market.
+
+                     *      *      *      *      *
+
+With the growth of the industry in Germany, the Bremen cotton trade
+expanded, and the business with the surrounding countries grew in
+proportion. Russia, Poland, Austria-Hungary, Switzerland, Italy,
+Holland and Belgium, all became faithful customers, and the Bremen
+Cotton Exchange hummed with activity. Here, was the centre of all the
+efforts to provide the consumer with the desired material at the lowest
+prices. Every evening, at a late hour, when the last news from America
+had arrived, a flood of telegrams carried advantageous offers down to
+the smallest and most distant places on the Continent. Not only the
+cotton spinner, but also the weaver, the printer and the wholesale
+dealer took an interest in the Bremen offers, like clockwork operated
+the business intercourse between the cotton factor and the cotton
+consumer.
+
+
+
+
+THE WAR.
+
+
+The Bremen Cotton Exchange has never occupied itself with politics,
+but, of course, the members could not help taking serious notice of
+occurrences which shook the world's foundation. Together, with the
+expansion of business, grew also a political apprehension. France was
+lending milliards upon milliards to the Russian Czardom, with the
+express condition, that the money had to be expended in preparation for
+a war against Germany. One saw, that France gave Egypt to England,
+although it did not own it, on the other hand, England ceded Marocco to
+France, without having any sovereign right over that country. That
+Germany had interests in both places, was overlooked. The English
+newspapers, so widely read in Bremen for their business news, brought
+articles upon articles, picturing the dangers of a German Invasion. In
+the most lurid of colors, the cruelties of the war were painted, that
+was supposed to threaten England, and all this, for no other purpose,
+than to inflame the passions of the English people.
+
+What did the commerce do in face of these threatening symptoms?--Nothing!
+Without an anxious thought, people looked after their business, and
+showed an optimism, which to-day, is inexplicable.
+
+On the 25th of July in 1914--after the Austria-Serbian ultimatum--careful
+merchants insured their afloat cotton against war risks. The big German
+Insurance Companies took this risk for 1/8%, let us repeat it, one
+eighth per cent! How was it that the insurance companies were so
+unconcerned? At the same time in Bremen, and at other places in
+Germany, many insurances were covered with English companies. Did
+nobody see danger ahead?
+
+All political misgivings of those days were silenced by the feeling,
+that to think of war was monstrous and to believe in war, an
+impossibility, on account of the highly developed economic relations
+which connected all countries.
+
+Yet the war came! At the outbreak, many cargoes of cotton owned by
+Bremen merchants were afloat, and many "future" contracts were open in
+the Liverpool market. Later on, the cargoes were taken by the enemy,
+and the Liverpool contracts were liquidated, in accordance with a
+certain system, but without the consent of the other parties to the
+contract, and without reservation of their rights. Bremen had a
+considerable stock of cotton at the commencement of the war,
+consequently was in a position to supply the German cotton mills for a
+long time. If proof had been needed to show the advantage of having an
+important cotton market in Bremen, the war would have furnished it. The
+cotton trade was not satisfied to deal only with the existing supply,
+but did its very utmost to secure fresh imports, and was successful, by
+means and ways hitherto unknown, to bring considerable quantities of
+cotton into Germany, where it was of great service.
+
+The Cotton Exchange does not trade, but under the war-conditions and in
+the knowledge of being the centre of commerce and industry, a
+courageous attempt was made. At the instigation of the Exchange,
+commerce and the spinners of Germany and Austria-Hungaria united, to
+give a bid for one million bales of cotton to the Americans. Cotton was
+no contraband of war, and America was neutral, so no difficulties
+seemed to be in the way of executing this plan. The buyer was prepared
+to pay the price which the Americans might demand, and the goods were
+to be paid in hard cash dollars. Yet the offer was not accepted,
+although America had sufficient reason to seek an outlet for the big
+crop it had grown, and that nobody wanted under the war conditions.
+Politics were too mighty for the reasons of commerce!
+
+After a while, all connections ceased with America. The Bremen Cotton
+Exchange and the cotton trade were at a stand-still. Now and then, the
+Exchange tried to place their establishment at the disposal of the
+trade in substitutes, but only with moderate success. To build up a
+lasting trade in substitutes was as impossible as it was to find a
+market for the substitutes, when once cotton began to appear again.
+
+
+
+
+THE RE-OPENING OF THE MARKET.
+
+
+After the armistice, the possibility presented itself again, of
+supplying the German cotton industry with raw material. The government,
+however, made certain stipulations under which the import might be
+carried on, but no hymn of praise can be sung about them.
+Notwithstanding all difficulties, cotton found its way into the
+country, and when, finally, all government measures were cancelled, the
+legitimate business was restarted. All round the Bremen market,
+competition had grown. Rotterdam made great exertions to push Bremen
+aside, even Copenhagen made similar endeavours. A few American firms,
+which were hostile to Germany, did their best to circumvent Bremen.
+These efforts, however, were not crowned with success, Bremen regained
+its position. It has been shown that the natural development through
+many years, cannot be killed and artificially replaced. The manifold
+relations, started in peace-time, of personal or business character,
+showed their value. The economic life flows through a great network of
+channels, should these be artificially closed, they will re-open again
+of their own accord, as soon as the barriers have been removed. During
+the war, the German cotton industry either stood still, or worked only
+with a small percentage of its machinery. The government had husbanded
+the supply of cotton most carefully, so that, after an unexpectedly
+long war, a little was still left over. The mills which were running,
+displayed great assiduity in procuring and utilizing substitutes for
+cotton. Paper, wood, cellulose, reed and nettle fibres, and other
+materials were tried, some were manufactured quite extensively. During
+the war they did good service, but in normal times, they cannot usurp
+the place of cotton. After surmounting many difficulties, the German
+cotton industry is once more in full swing, and with it, Bremen is
+again the important continental cotton market. The surrounding
+countries buy in Bremen as of old, though some outlets are still
+closed, owing to political and economic reasons.
+
+During the last three years, before the war, the import of North
+American cotton to Bremen averaged 2 500 000 bales, during the season
+1920/21, it reached 1 200 000 bales, and in 1921/22, 1 500 000 bales,
+the decline, against the former years, is caused, partly, by the
+disappearance of some outlets, and partly, by the shorter working day.
+
+
+
+
+AMERICAN CROPS AND CONSUMPTION.
+
+
+The activity of the "Bremen Cotton Exchange" depends, to a large
+extent, upon the import figures, and these again are under the
+influence of the various crops. In America, big crops alternate with
+small ones, the cause for this diversity is to be found in the climate
+conditions, and also in the ruling range of price. High prices
+stimulate an extensive planting and a careful cultivation of the
+ground, while low prices have the contrary effect. The crop figures
+from 1872-1914, were ascending, an occasional decline was made good
+later on.
+
+The following figures will make this clear.
+
+    American crops:
+
+    1872    3 650 000 bales
+    1875    4 302 000   "
+    1878    4 745 050   "
+    1881    5 136 000   "
+    1884    5 477 000   "
+    1887    6 884 000   "
+    1891    8 940 000   "
+    1894   10 025 000   "
+    1898   10 985 000   "
+    1901    9 749 000   "
+    1904   13 697 000   "
+    1907   11 326 000   "
+    1910   11 966 000   "
+    1913   14 614 000   "
+    1914   16 738 000   "
+    1915   12 013 000   "
+    1916   12 664 000   "
+    1917   12 345 000   "
+    1918   12 817 000   "
+    1919   11 921 000   "
+    1920   13 711 000   "
+    1921    8 000 000[1]"
+
+      [1] estimated.
+
+The reverse, which the production suffered since 1914, is remarkable,
+it is largely accounted for, by the want of artificial manure. German
+potash could not be obtained, and this was largely used by all cotton
+states, with the exception of Texas, Louisiana, Mississippi, Arkansas,
+which do not require that kind of fertilizer. In addition, the boll
+weevil has become a dreaded enemy of the cotton plant. The insect world
+produces quite an army of little fiends, that viciously attack and
+reduce the crop, many have disappeared, but the boll weevil is, at
+present, the arch-enemy; it is a small beetle which bores into the
+bolls to deposit its eggs there.
+
+The following figures give the distribution of the American crops.
+
+        | Export from America |         |   Taken by  |
+        |         to          |         |   American  | Percentage
+        |  Great  |Continent, |Total in |   Spinners  |of the crop
+        |Britain  |Japan etc. |thousands|(in thousands|used by the
+        |in thousands of bales|of bales |  of bales)  |   U.S.A.
+        +         +           +         +             +
+1871/72 | 1 474   |    483    | 1 957   |     1 097   |     37
+1874/75 | 1 833   |    841    | 2 674   |     1 201   |     31
+1877/78 | 2 047   |  1 309    | 3 356   |     1 496   |     31
+1880/81 | 2 832   |  1 733    | 4 565   |     1 938   |     29
+1883/84 | 2 485   |  1 432    | 3 917   |     1 877   |     33
+1886/87 | 2 704   |  1 741    | 4 445   |     2 088   |     32
+1890/91 | 3 345   |  2 446    | 5 791   |     2 640   |     30
+1893/94 | 2 861   |  2 371    | 5 232   |     2 291   |     30
+1896/97 | 3 022   |  2 957    | 5 979   |     2 792   |     32
+1900/01 | 3 050   |  3 488    | 6 538   |     3 547   |     34
+1903/04 | 2 577   |  3 455    | 6 032   |     3 935   |     39
+1906/07 | 3 750   |  4 614    | 8 364   |     5 005   |     37
+1909/10 | 2 430   |  3 778    | 6 208   |     4 256   |     40
+1912/13 | 3 604   |  5 176    | 8 780   |     5 389   |     38
+1913/14 | 3 419   |  5 447    | 8 866   |     5 503   |     38
+1914/15 | 3 798   |  4 571    | 8 369   |     6 088   |     40
+1915/16 | 2 866   |  3 185    | 6 051   |     6 810   |     53
+1916/17 | 2 888   |  3 076    | 5 764   |     6 914   |     55
+1917/18 | 2 247   |  2 179    | 4 426   |     7 073   |     59
+1918/19 | 2 621   |  3 025    | 5 646   |     5 460   |     48
+1919/20 | 3 062   |  3 300    | 6 362   |     6 131   |     50
+1920/21 | 1 583   |  3 771    | 5 353   |     4 914   |     48
+1921/22 | 1 946   |  4 586    | 6 532   |     6 308   |     50
+
+From these statistics the important lesson to be learnt, is, that
+America has surpassed all other countries in the growth of the cotton
+industry. Fifty years ago, and later, America used only about 30% of
+the crop for home consumption, while now, it requires more than half.
+Equally remarkable is also the rapid growth of Japan. For many decades
+after 1872, Japan used hardly any American cotton, but in 1913, it took
+465 000 bales; in 1920 780 000 bales; in 1921: 600 000 bales, and the
+estimate for 1922, is 800 000 bales. Besides this, a great many other
+descriptions are spun there. The use of East Indian cotton is even
+greater than that of American, and it reached two thirds of East
+India's consumption, thus placing Japan, after America and England, in
+the third place of cotton consuming countries. During the first half
+year of 1921, it has even outdone America and England, because these
+two countries were in the throes of a crisis.
+
+For many decades, England had almost a monopoly for providing Asia, and
+the rest of the world, with cotton goods, and required a corresponding
+amount of raw material, but now, it has lost that position. Grave
+concern is felt in England, as well as in the whole of Europe,
+regarding the future of the cotton industry, as it seems impossible to
+prevent a further expansion in America and Japan, besides that, there
+is the growing menace of the boll weevil, which many people consider an
+unwelcome guest, that has come to stay.
+
+Amongst the other cotton growing countries, Brazil perhaps, offers the
+best prospect, on account of the great interest taken there in the
+cultivation of the cotton plant, also, the Argentine gives rise to some
+hope.
+
+
+
+
+BREMEN'S POSITION IN COMPARISON TO THE RIVAL MARKETS.
+
+
+The following figures are intended to show how the imports of Bremen,
+and its consequent importance, have grown in comparison to the great
+rival markets of Liverpool and Havre:
+
+                     The Import was to
+                |  Bremen   | Liverpool |  Havre
+                | in 1000   |  in 1000  | in 1000
+                |  bales    |   bales   |  bales
+                +           +           +
+    1880/81     |     452   |   2 843   |     543
+    1883/84     |     422   |   2 470   |     465
+    1886/87     |     493   |   2 694   |     471
+    1890/91     |     911   |   2 314   |     525
+    1893/94     |     832   |   2 732   |     578
+    1896/97     |   1 213   |   2 683   |     672
+    1900/01     |   1 546   |   2 478   |     711
+    1903/04     |   1 757   |   2 081   |     690
+    1906/07     |   2 083   |   3 251   |     863
+    1909/10     |   1 760   |   2 089   |     948
+    1912/13     |   2 216   |   3 066   |   1 001
+    1913/14     |   2 619   |   2 903   |   1 021
+    1919/20     |     385   |   2 477   |     555
+    1920/21     |   1 279   |   1 525   |     583
+
+There are not exact statistics before 1880, however, Bremen's yearly
+import will have been 2-300 000 bales. From small beginnings, quite a
+creditable result has been reached, that is worthy of some
+consideration.
+
+History frequently chronicles the decay of some once flourishing
+commercial centre, and nobody knows to-day, the exact reason. Was it an
+opportunity missed? Of such, no records are kept in the book of time.
+Should anybody compile a history of lost opportunities, it might easily
+require a bigger volume, than that needed for the story of
+opportunities taken at the crucial moment.
+
+The river, on which Bremen is situated, was so heavily silted up, that
+sometimes in Summer, one could wade through it; no sea-going vessel
+could reach the town. Under these circumstances, the opportunity of
+establishing a cotton market in Bremen might easily have been missed.
+The trade which was indigenous to Bremen passed, in the second half of
+the 19th century, through a period of transition. The shipping business
+from olden times, a main stay of Bremen's commerce, had to adapt itself
+to more modern requirements. The small vessels hitherto used, had to
+make way for bigger ones, the steamship had entered into the world's
+traffic. There was hardly a proper connecting link with the interior,
+no water ways existed, and the efficiency of the railways was extremely
+poor. Surely, these were not conditions that cried for the opening of a
+market centre. Yet it was established, it grew and blossomed into
+success.
+
+Was this chance or method?
+
+We owe many thanks to the State of Bremen for its co-operation, for,
+with astounding energy, this small state undertook to build a sea-port
+in Bremen town. This necessitated the deepening of the river "Weser",
+to which work the neighbouring states lent no help, but rather, placed
+difficulties in the way.
+
+This grand work deserves an essay of its own, on account of its
+influence on the commercial, political and economic position of Bremen.
+Here only, be it mentioned, that the furtherance of the cotton trade
+was a constant stimulus to this great plan. The authorities and the
+representatives of the trade were in the best harmony, and the most
+perfect arrangements were made for the dealing with cotton. Great
+practical knowledge and experience was shown, in settling the question
+of how to raise the interests and amortization needed for the vast
+expenditure, and of how much the trade could bear without crippling it.
+The state furnished the capital for the building of great warehouses,
+and within a number of years their cost was paid off, as planned. In
+this way, Bremen became equipped with all modern requirements for the
+handling and storing of cotton, which, even to-day, are unsurpassed.
+The port has the highest reputation for the quick and painstaking
+unloading and dispatching of cotton cargoes.
+
+The co-operation of the banks has already been mentioned, but we do not
+deem it superfluous to repeat, that without capital, no enterprise can
+be effectively launched, and all roads to successful completion are
+barred. Fifty years ago Bremen was poor in capital. What existed of
+riches, and was not needed in business, was, by preference, locked up
+in American securities, very little was left liquid for the Cotton
+Trade, although big amounts were needed to handle the import of cotton.
+Credit is not given by merely asking for it, only he is entitled to it,
+who is sure that he can fulfil his obligation. To incur debts, trusting
+to luck to pay back, is bad policy. It is unfair dealing to accept
+goods on credit in the hope that their sale will leave a profit, this
+is only permissible, when sufficient capital is in existence to pay for
+the goods, even though a loss takes the place of the expected profit.
+As these views dominated the trade, close connections could be started
+with the banks. State and banks have greatly helped the growth of the
+Bremen cotton trade, besides them, however, the assistance of many
+others must be gratefully acknowledged. Most particular reference has
+to be made to the forwarding trade. With admirable energy, the
+forwarding houses made all arrangements for the careful and expeditious
+handling of the technical part of the cotton trade. Right from the
+beginning, they worked on the principle of trustworthiness and
+reliability, well knowing, that only by these, a mutual confidence
+between all parties could be established. The great trust shown, alike
+by shippers and receivers, to the Bremen Forwarding firms, has made the
+dealing so easy and satisfactory. The post and telegraphic authorities
+have likewise been imbued with good will towards the needs of commerce,
+thereby assisting considerably the furtherance of trade. The harmonious
+cooperation of so many powerful allies, enhanced the value of the work
+done by the cotton market itself, though, never for a moment, must the
+diligent work slacken, lest the budding tree should stop growing.
+Anybody engaged in the cotton business has to be at his post every
+minute, always ready to take a given opportunity. Exact information
+concerning the conditions in America, as well as personal connections
+in that country, are of great value. It is characteristic of the German
+merchant to follow up a business once he has commenced it, and this
+close attention, from early youth to ripe old age, has contributed
+materially to the success of the Bremen cotton trade.
+
+
+
+
+FLUCTUATIONS IN PRICES.
+
+
+In the Spring of 1921, the following conversation might have been
+overheard between an American and a German.
+
+    A.: You see the consequences of the war are worse for the victor
+    than for the vanquished.
+
+    G.: Only apparently, and for the moment. The future, I fear, will
+    teach us something different.
+
+    A.: Nobody can look into the future. At the present minute, we
+    witness the biggest economic collapse that the world has ever seen,
+    all countries suffer from it, except Germany. All states had made
+    preparations for peace, now the stored up goods are lying there and
+    nobody wants them, not even Germany. We thought, that Germany, bare
+    of everything, would swallow anything.
+
+    G.: The reason is, that Germany cannot pay. Her gold and tangible
+    gold values have been taken from her. Why do not the other
+    countries buy? Their peace production has been lying idle for
+    years, consequently, the shelves must be fairly empty.
+
+    A.: Quite right, but prices have risen to an unreasonable height.
+    During the war, a most wasteful regime prevailed; everybody made
+    big profits or received huge wages, and accustomed himself to a
+    most sumptuous life. Now, vengeance is upon them, for nature does
+    not allow herself to be ravished, nor does she present gifts for
+    extravagant living.
+
+    G.: If prices have been driven to an unreasonable level by wasteful
+    workings, then, a big decline in prices is the only remedy.
+
+    A.: We are in the midst of a phenomenal collapse of prices. Cotton
+    is a barometer for all other goods. The price in America is,
+    to-day, 11 cents, a short while ago, it was 40 cents.
+
+    G.: What does the planter say to this?
+
+    A.: The cost of production is for him this season about 25-30 cents
+    per pound. He has worked for nothing, and besides, loses a good
+    deal of money, as his means are small, he will be heavily in debt.
+
+    G.: And the further consequences?
+
+    A.: The planter is absolutely unable to produce a similar crop. It
+    is the old story, when prices are too low the crop will be
+    curtailed.
+
+    G.: We have always experienced that low prices are followed by high
+    ones. What other consequences is this collapse in prices likely to
+    have?
+
+    A.: All cotton goods fall in the same proportion as the raw
+    material, this means a bad crisis for commerce and industry, and an
+    unprecedented amount of unemployment. Besides, this collossal drop
+    in prices has caused other very peculiar situations.
+
+    G.: Of what nature?
+
+    A.: It is well known that cotton is rarely bought at a fixed price,
+    but generally, at the "future" price of the day on which the buyer
+    "calls" his cotton, plus or minus the agreed upon difference for
+    the quality bought. Now, several American houses sold low qualities,
+    at 12.50 cents "off". At that time, "futures" were 40 cents, so
+    that the seller calculated to receive about 27.50 cents, to-day,
+    "futures" are 11 cents, so that, if the buyer "calls" his cotton
+    to-day, he receives it for nothing, and can claim 1.50 cents per
+    pound as well.
+
+    G.: Impossible! No German law would permit a buyer to demand his
+    goods, without paying a price at all, and be justified in claiming
+    money in addition from the seller.
+
+    A.: What decision would the Bremen Cotton Exchange give? Two
+    possibilities are to be taken into account. If the seller has taken
+    a "future" contract as cover, he has no loss, even if he gives the
+    cotton for nothing, and pays 1.50 cents in addition, because the
+    difference in the "futures" indemnifies him. But if he has no
+    "futures", what then? to part with valuable cotton for nothing, and
+    pay good money as well, would exceed the demands of Shylock.
+
+    G.: The "Bremen Cotton Exchange" would probably decline to
+    adjudicate, it has the right to refer it to the ordinary law
+    courts.
+
+    A.: A hard nut to crack for the law!
+
+German and American agree on the following:
+
+    It is a peculiar thing that cotton has always new riddles in store
+    for us. The fluctuations in prices are enough to drive a man mad.
+    Woe to him, who is drawn into that maelstrom. The hedges are a
+    safe guard against price fluctuations. The careful merchant thinks
+    he is on solid ground, when, all of a sudden, the premium for the
+    quality begins to rock and he wonders what is worse? the
+    fluctuation of the "future" market, or those of the premiums.
+    Hundreds of thousands of bales have been sold, at a premium of 10
+    to 15 cents for goodmiddling, to-day, the premium is 3 cents, that
+    spells hard times for the cotton market. It is a consolation, that
+    bad times are quickly followed by good ones, and that the darkest
+    hour is before dawn. Cotton typifies life and death, joy and
+    sorrow. It is like an untamed animal, it deals serious wounds, it
+    indulges in "buck jumps", that none can foretell, nobody has ever
+    driven it in harness. And yet, he, who deals with it quietly,
+    carefully and pluckily, will always remain fresh and full of life.
+
+                            Cotton is king!
+
+
+
+
+THE EXCHANGE BUILDING.
+
+
+In the year 1902, the Bremen Cotton Exchange opened the doors to its
+various tenants, and, as the outward appearance of a man has an
+influence on the impression he makes upon us, so does the building
+which houses the cotton trade, play its part. Previous to that date,
+the business of the Exchange was carried on in rented rooms, but with
+expanding trade, these became inadequate, and a new building was
+contemplated; the idea was, to make the outward appearance worthy of
+the importance of Bremen's cotton trade, with due consideration to the
+local conditions. Bremen can boast of a thousand years history, and has
+many fine examples of ancient architecture, notably around the market
+place. There you find in the rich ornate style of the renaissance, the
+"Rathaus" (town hall) and in another style, that however blends
+harmoniously, is the "Schuetting" (the seat of the chamber of commerce),
+the "Dom" (cathedral), the "General Exchange", as well as a number of
+private houses of a later date. The combined appearance of these
+various buildings, form an imposing picture. The site for the new
+exchange is situated in this very neighbourhood, consequently, a
+building had to be designed that fitted in with the whole scheme.
+Prominent architects competed, and the plans that gained the first
+price were accepted, and commissioned for execution. Unfortunately, it
+was proved later on, that the choice had not been a lucky one. The
+architect adopted the style of the ancient "Rathaus", but the rich
+ornamentations of this architecture, proved its doom. Beautiful as the
+effect was on the smaller, gracefully built, Rathaus, yet on the
+ponderous building of the "Exchange", it was utterly unsuitable, and
+another thing the architect did not consider sufficiently: The old
+guild masters, with their circumspection and devotion, erected
+buildings to last an eternity, while now-a-days, all is hurry and
+scurry, the sooner the job is finished the better, as fresh orders are
+waiting. This may, possibly, be some excuse for the little care
+bestowed upon the selection of the material. The soft sandstone
+selected, was excellently suited to the quick sculpturing of the
+over-rich ornaments, nevertheless, it was a ghastly mistake to have
+chosen it. Ten years after the building was finished one of the
+decorations, loosened by the weather, fell, and killed a member of the
+Exchange. An examination showed that a great number of projecting
+stones were so weatherworn, that they crumbled in the hand. An ugly
+scaffolding had to be erected to protect the street traffic. Measures
+were at once taken to construct the front of the building more solidly;
+the most prominent experts were asked for their advice, but the war
+broke out, and nothing could be done. During the first years after the
+war, want of money prevented the starting of the repairs. These had
+become more extensive, owing to the revolution, when the building had
+been under artillery and rifle fire. At last, however, came the
+propitious moment, when one could think seriously of beginning the
+work. It was thought of raising half the estimated cost of 15 millions,
+by voluntary contributions from the trade and the industry, and both
+responded nobly to the call. But the moment the money was secured, most
+of it melted quickly away, through the depreciation of the Mark.
+Nevertheless, this day of the 50th anniversary sees the work in full
+swing, and it will not be long, before the too richly carved front of
+the building will have given place, to one of greater simplicity and
+nobility, which better express the wishes of the Cotton Exchange. The
+interior of the Exchange is entirely adapted to the needs of the
+business, special attention is being paid to the light. The judging and
+valuing of cotton, require a pure and clear day light, this is of such
+importance, that it cannot receive too much consideration. A portion of
+the building is reserved for the Cotton Exchange, while the remainder
+is utilised as offices for the various cotton firms, unfortunately,
+there is not room enough for all of them. It would be of great
+advantage, if all the firms could be housed under one roof, and plans
+for this are contemplated, but when they will be executed, depends
+entirely upon the economic development of the future.
+
+
+
+
+WORLD-WIDE BUSINESS.
+
+
+A New-York commission agent, who has connections all over the world,
+receives a telephonic message from Texas to sell 100 bales of
+"futures". At the same moment, he receives a cable to buy a 100 bales
+of "futures", both orders equalize each other, the execution is easy, a
+few words on the telephone, a cable, a letter, and the business is
+done. Such transactions are daily occurrences, they leave no particular
+impression, nor call for any deep thought. And yet, it is very
+interesting to probe deeply to find the origin of this business. A
+planter in Texas has worked hard for six months with his entire family,
+to raise his cotton crop. In the early days of Spring, the ground had
+to be cleared and ploughed to prepare it for the seed. Then comes the
+time of sowing, and soon afterwards, the weeds require attention.
+Hardly have these been uprooted, when the injurious insects make their
+appearance, they are destroyed by artificial means. Over and over
+again, the fields require most careful attention, till, at last, the
+cotton begins to ripen. In the broiling sun it is picked, and only
+then, the planter is sure about the out-turn of his crop. The prices
+are favorable at the moment, and he makes his calculations. For extra
+help, he had spent so much, and for the frugal life of his family and
+himself, a further amount was required, but the account was all right.
+If he could obtain the present price for cotton, he could pay for
+everything, and have a margin to the good. He decided to secure the
+price by giving the afore-mentioned order.
+
+In the family of a landed proprietor in Hungary, was joyful excitement,
+the daughter of the house had become engaged to be married. The wedding
+was to take place soon, and the question of the trousseau was
+discussed. This, resulted in a visit to a merchant in a neighbouring
+town, who discovered that his stocks had run too low for the reputation
+of his business; at once, he gave a commission to the wholesale
+merchant, who, in turn, sent a considerable order to the manufacturer.
+Thus it goes on, till finally, the mill that spins the yarn, buys the
+cotton in Bremen, where the merchant cables New-York, to cover the
+"futures". The business, so unconcernedly done in New-York, had deep
+lying reasons, which never came within the vision of the commission
+agent. In a similar manner, the world's transactions are governed. We
+do not look beyond our own particular horizon, we take what the minutes
+bring us, without troubling our sluggish mind for the "whys" and
+"wherefores". Nothing, however, is done in the world's eternal circle,
+without cause and effect. Should our mental capacity be able to grasp
+every transaction in its entirety, we should see, that a never ending
+thread connects all of us who live and work.
+
+When the thread is broken, disorder and confusion replace the
+organisation, that is as finely balanced as the delicate works of a
+clock, and endless trouble is required to piece the thread together
+again.
+
+
+
+
+CONCLUSION.
+
+
+The jubilee of the "Bremen Cotton Exchange" takes place at a time, when
+all economic conditions are in dire confusion. Never before, was the
+economic life, embracing all countries, so finely spun, as in our
+modern times, and now, the net is torn in untold places. The old
+Europe, predominant for over two thousand years in all spheres, lies
+bleeding from serious wounds, and the question is, what part will it
+play in the future, what will be its fate? Finally lost is the dominant
+position in the region of Finance. No longer does it reap the interests
+and means, which originated from the economic assistance it gave to
+countries in other parts of the globe. On the contrary, Europe, itself,
+has to pay interests, and within Europe, between the different
+countries, obstructions and impediments are heaped upon each other, to
+surmount them, is a work for "giants"! The only consolation is, that it
+is not the first time that Europe and our own Germany were in sore
+distress. In all previous cases, it recuperated, and rose, like a
+Phoenix, from the rejuvenating fire. The plague and other dread
+epidemics have devastated towns and countries, wars have destroyed
+peoples and their culture. Final ruin we see, only in cases, where
+discord and lack of reason have permanently come to reign.
+
+The continued depreciation of currency in the affected countries, is
+one of the causes of the many grievances. No remedy has yet been
+discovered for it, but it must be apparent to everybody, that the most
+precious treasure possessed by man, is not GOLD, but "WORK"!
+
+Work alone, however, is not in all circumstances a protection against
+misery. The possibility must exist to use it correctly in exchange for
+other goods. The overthrow of all to which we have been accustomed, is
+likely to cloud our vision, but, ultimately, we have to acknowledge
+that men and nations depend upon each other, and that, in the exchange
+of our earthly goods, life and the pleasures of life can be found for
+each individual.
+
+Amidst all this oppression and tribulation, it is a blessing to be able
+to look back upon a successful past. This privilege, however, has stern
+duties: to keep up the traditions of the past, to adhere to the
+approved fundamental principles, to regain the lost, to strive and
+build up afresh.
+
+With this determination, the Bremen Cotton Exchange celebrates its
+fiftieth anniversary.
+
+
+
+
+
+
+End of Project Gutenberg's Bremen Cotton Exchange, by Andreas Wilhelm Cramer
+
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