Andreas Wilhelm Cramer

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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 ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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 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. ”

“ 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? ”

“ 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. ”

“ 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. ”

“ 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 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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 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. ”

“ 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. ”

“ 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 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. ”

“ 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. ”