72 the cotton trade in England

the “ thirties.” At that time cotton, even when the old merchanthad disappeared, was still made dearer by 31s- per cent.; 2J percent, went to the importer and J per cent, to each of the twobrokers. To-day Liverpool demands only 1 to 1A per cent, forthe importer and Jr per cent, for the buying broker (i f)—nottoo high a payment for the advantages which the Liverpoolmarket secures to English spinners.

If the market, when compared with the “thirties,” shows asimplification of the commercial routine, this is due to thelessening of the risks by the influence of modern improvementsin communication, which brought the countries of the worldnearer together. But as well as the traffic there was a secondmoment which lessened the dangers of business; the progressingimprovement of commercial life itself, especially the introductionof business in “futures.” This weakened, as Ellison distinctlypoints out, the risk of imports so much, that a section of importmerchants existing solely for this purpose, and standing in con-nection with the market only through the broker, becameunnecessary.

In the next place it is certain that the flourishing of businessin futures neutralised the too violent fluctuations since the“ sixties.” Human intelligence is successful in an increasingdegree in foreseeing want and abundance, and by means ofspeculative transactions compensating for their influences (15).Therewith a formerly unknown equality of prices was attainedfor the most important raw materials of human use, especially,next to wheat, for cotton. But independently of this, businessin futures helps the importer directly, as an assurance againstrisk. If he buys cotton at a favourable price in the producingland he can immediately sell in Liverpool the same quantity forthe date at which the cotton, as far as can be seen, will reallyarrive; by a further fall in cotton prices and loss on the realbusiness he can then recoup himself by the speculative profit onfutures; by the rising of prices he can balance the speculativeloss by the profit on the real goods. He is placed in the sameposition as if prices since the transaction of business had notchanged.

Thus, side by side with the development of communication,the progressive development of commerce led to a simplifying

14. Compare JEllison, p. 2S0.

15. Compare Sonndorfer : Technik des Welthandels,” p. 14.