FORTUNES MADE AND LOST.

Otago Witness, Issue 1901, 10 July 1890, Page 35

FORTUNES MADE AND LOST.

It is a moot point 'whether more money was made than lost daring the cotton fever which accompanied the complete outting off of supplies of the raw material during the three years of the American Civil war. There were a few shrewd people wha were; aware of the bitterness o£ the quarrel between the Northern and Southern States, the cause of whioh was the question of slavery, and they foresaw the inevitable struggle, but' the'great majprity of spinners, merchants, and brokers refused to believe in the certainty of war, arid allowed the opportunity to slip by without covering themselves to any great amount. When the first shot was fired, however, a condition of things unparalleled in the history of the cotton trade commenced,' for cotton rose f*pm 4Jd per lb (good average American) until it reaohed Is 6d per lb in the coarse of about 12 months. As risual, j when a scarcity is expected, every one who could bny rushed into the maiket,.and made matters 10 times worse. The Liverpool Exchange oeoame little else that a huge.betting olub. Brokers, spinners, manufacturers, : clerks with nothing behind them in the shape of capital, vied with eaich other in buying up cotton for future delivery; thousands of bales were sold which had no existence except on paper, and when settling day came the balance, according as the market had advanced or receded, was handed over to the proper party. The late George Peabody, banker and philanthropist, is reported to have made no small portion of his magnificent fortune by advances made to his wide-Awake countrymen, who gave as security, the bills of lading of immense stores of cotton lying in the harbours of Riohmond and Alabama. One firm of finishers and manufacturers at Todmorden bought heavily of grey calicoes, and stocked one of their warehouses with them, running up the list from time to time as they quietly watched the rising of the Liverpool market, until from 3£d and 4d per yard they realised a profit of fully 100 percent. There can be no doubt that numbers of people connected with the cotton interest made large -fortunes, but many, on the other hand, believed that the war would continue for years, and speculated once too often. Among these latter was Mr James M , a large Stockporfi spinner, a tall, gentlemanly man, who dressed in the old style, and who acknowledged to having made three quarters of a million storting by his transactions in cotton. If he had held his hand at this point all would have been well, but, as io often happens, he was dazed by his successes, and believed that another haul of many thousancJs was within his reach. Jtust at tfiis crisis he invited his foreman, an old servant;, and a man in whom he had unbounded confidence, to sapper with him, and although he had made up his mind, he probably wished to sound him as to what he thought of the safety of another large transaction. The foreman was decidedly averse to having anything more to do with it, and advised his master to be content with what he had done, backing up his advice by saying that there was no risk in tbe course he suggested, whereas the risk oi heavy transactions at the high price it had then reached was little short of desperate, as the tide must soon turn. One who was present says : "So warm, did he become, indeed, in the advocacy of his views that the two well-nigh lost their temper, and the foreman lefo without having been able to alter hismaster's decision." The sequel proved as was expected by the foreman, for Mr M 1 majg h^m|e,lf. rejjpo^sjbj^ &h,orj;ly aijsr.ww<3s

for an immense quantity of cotton from all parts 6t the wdrld, and before he could reaiiae eh it the city of Uiohmorid was taken, arid with it down came the price of cotton; the three-quarters of a million melted away, and Mr M was in the bankruptcy court within 12 months of the date of the supper party. The price reached by manufactured cotton (about 9d to Is per yard for a fair quality) mu6t always be considered a fictitious one, caused' mainly by the wild spirit of speculation which men or all classes connected with the industry indulged in. But it was never likely that the public would submit to pay the advance when the price of cotton reached that of woollen materials. The careful housewife acted like those besieged, and eked out her supplies with a most economical hand; India, too, came to our assistance with her Surat cotton, and though it was then execrable, it served to eke out the »upply, so that scarce as cotton was, there was always some of it to be had — the lower-priced of very inferior quality* the best at enormously inflated prices. But the end of the American war, whioh was the cause of the disorganisation of the cotton market, came sooner than many people expected. The Northern States, unsuccessful at first, and beaten back in the earlier engagements, not being so well prepared for the struggle as the Southern, which had been training their forces long before the war actually broke out, gradually narrowed the oirole of the war, and when Richmond was taken the power of the South was completely broken. As soon as thia was seen speculation on the Liverpool Exchange virtually ceased, and though it was several yean before the price of raw cotton came down to anything like its previous low figure, yetitwaa not long before the stores of cotton on the American seaboard were released, and the great strain was over. . . j It is now some 33 years since these events took place, and probably there are no large buyers on the Liverpool Exchange who took part in this remarkable crisis. A whole generation has since then passed away, and few will remember the exciting markets of that period, when it was no uncommon thing to hear that from 25,000 to 30;000 bale*, of cotton had nominally changed hands in a single day. The average sales now are from 5000 to 10,000 bales, the price remaining comparatively steady, disturbed only oocasionally by syndicates which attempt to " corner " cotton in the face of the new crop. But if there is not now the money to be made out of this indispensable material which waß made in so many caseg during the three years of the American Civil war, it is a consolation to know that neither is there so much lost, and that-the trade is altogether on a safer and sounder basis. As a matter of fact raw cotton has never fallen to the low point it reached previous to the war, but tha enormous improvements in spinning and weaving have enabled -manufacturers to place piece cotton, on the market at such a price as to be within the reach of the very poorest in the community.— J. L., in Leeds Mercury. '