The Cotton Exchange
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The most important commodity to the port of Galveston was cotton. Practically all of the merchants of the early city bought and sold it, and advanced money to planters with cotton as security. There were no rules or regulations; each firm or individual trading direct with the producer on such terms as were agreeable to the two parties at interest. There were no standard of grades, and such a thing as futures were unheard of. Every man engaged in this business paid strict attention to his own affairs and his competitor did likewise unless there was a conflict of interests, and then the dispute was generally taken to the courts. Before the '70s nearly all cotton grown in Texas was shipped to Galveston, except a small proportion from east Texas which found its way to New Orleans via the Red river. Rail transportation was in its infancy and the only mode of transportation was by wagon to the rail terminal. Cotton was sent to Galveston or Houston and either sold at once to a dealer or stored for future sale.! Prices were regulated strictly on the supply and demand basis. The dealer traded with eastern mills and shipments were made from Galveston in small schooners to New York, Baltimore and New England destinations. A primitive and on the whole a most satisfactory condition prevailed, especially satisfactory when viewed from the present day point of view, when the modern merchant is faced with market conditions over the world, future markets, farm boards, overproduction and other conditions which were wholly unknown in the '70s. Railroads were being built and extended and in this period the Houston & Texas Central reached Denison, connecting at that point with lines reaching St. Louis. The Texas & New Orleans had reached New Orleans, and rail transportation was now available to the cotton shipper. Receipts at Texas ports dropped and changed conditions demanded a different method of handling at the ports. The march of progress was not to be denied and "the good old days" were passing. The cotton factors formed an organization, as did the buyers, but neither functioned very effectually because of violent differences of opinion among the members. A convention of the factors was held on October 28th, 1872, to consider the situation, and determined to dissolve the association. Colonel W. L. Moody, chairman of the association, called the meeting to order and explained that the object of the meeting was to organize and exchange, and he suggested that the factors association be dissolved so as to allow its members to join the exchange if they so desired. Colonel Moody nominated J. Frederich for chairman and E. S. Flint as secretary of the new organization, and both men were unanimously elected. There was some discussion as to the rules and by-laws and the membership roll was opened. Those who enrolled at this meeting were: Frederich and Erhard, Arthur, Classon & Wieting, Allen, Lewis & Co., Jno. D. Rogers & Co., Moody & Jemison, Stowe & Wilmerding, Focke & Wilkens, Lee, McBride & Co., Campbell & Clough, Shackelford, Brown & Co., Geo. Bondies, and Duble & Wooters. Another meeting was held on April 27th, 1873, and a committee was appointed to draft rules and by-laws. At the meeting on the 6th of May it was announced that twenty members had been secured, and the Galveston Cotton Exchange was declared organized. At a meeting on the 24th of May, the first election of permanent officers was held and W. H. Sellers was chosen for president, W. K. McAlpin, vice-president, and M. Quin, treasurer. The first action taken by the Exchange, other than organization, was the launching of efforts to secure a weather bureau station for the city. A. G. Mills was elected secretary at the meeting in June and the Exchange records speak highly of his work in perfecting the organization and systematizing the operations. The first quarters leased were in the Moody & Jemison building, where meetings were held for several years. Even in these early days of railroads, the matter of railway rates and regulation was troublesome. In August, 1873, a committee consisting of John Sealy, Chas. Vidor and P. J. Willis, was appointed for the purpose of "devising some remedy for the vexatious railroad regulations". The records show that 328,808 bales of cotton were received in that season, about ten percent of the entire crop of the United States. In October, 1873, a committee of buyers conferred with the exchange, submitting some proposed changes in the rules regulating sale, purchase and inspection of cotton, also the request that the Exchange membership be changed to individuals instead of firms. The latter suggestion was acted upon favorably, the change becoming effective December 31. The cotton receipts for the season 1873-74 were 371,741, and the next year, 354,927 bales. From History of Galveston, Texas, 1931 |
