Chapter II: Part 2

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 "Schütting" (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