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The industry had expanded, and the occasional chance business had been replaced by a more regular and closer connection with the spinners.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.