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.