Bremen Cotton Exchange, 1872/1922

by Andreas Wilhelm Cramer

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.