The author wishes to thank Bernhard Gissibl (Mainz) for his helpful suggestions and comments.

When Adolf Waibel, the director of the Augsburg cotton company SWA (Mechanische Baumwollspinnerei und Weberei Augsburg), attended a conference of the International Cotton Federation in Atlanta, Georgia, from October 7 to 9, 1907, he was especially struck by the local cotton farmers, whose “sunburnt features and wiry frames gave the meeting its distinctive character.”¹ Any time a speaker gave voice to the American farmers’ concerns, Waibel reported, they erupted into paroxysms of “thunderous applause,” making him “think involuntarily of the Wild West.”² For Waibel, the conference in Atlanta was the highlight of an extended fact-finding mission.³ A delegation from the Old World had spent almost three weeks travelling by chartered train around the Cotton Belt in the southern states, covering a total distance of over 7,500 kilometers. Although the Augsburg textile industry had been importing cotton from the USA since at least the 1840s, Waibel (fig. 1) was the first Augsburg businessman to meet in person with American farmers and representatives of the cotton exchanges, cotton presses, and railway, shipping, and insurance companies that dealt with the coveted commodity.

Although Waibel’s trip only took him to the transatlantic stations of the global cotton trade, it does illustrate how Augsburg’s textile industry was enmeshed in a complex international network. From the 1840s onwards, the city’s exponentially rising demand for cotton had seen it become one of Germany’s leading centers for textile manufacturing, with almost a million spindles (nearly 10 percent of Germany’s entire spinning capacity) by the eve of the First World War.⁴ It was only able to achieve this status due to its access to cheap US cotton. How did Augsburg textile businesses, whose annual cotton demand grew to some twenty-five thousand metric tons by 1914, organize exports of the commodity from the USA? How did the global cotton trade, long dominated by the British Empire, manifest itself in the Bavarian city? How did local businesses compete in the global market for what Sven Beckert has described as “the most important commodity of the nineteenth century”?⁵

Methodology: Global History

In order to formulate these questions more precisely, it is helpful to consider the methodologies of the school of “world” or “global history” that developed in the 1990s.⁶ Whereas German historiography had long focused primarily on the expanding mesh of relationships between nation-states, this new perspective on global history explores the growing interaction and integration of a transnational, intercontinental, worldwide network of economics, society, politics, and culture in a manner unconstrained by Eurocentric theories of modernization.⁷ Global historians view the economy as a key driver of developments in these other areas, though without subscribing to any form of economic reductionism. In a global history of the nineteenth century, nation-states and individual German states such as Bavaria, Prussia, and Saxony recede into the background as historical actors; instead (assuming we do not wish to abstract away from specific places altogether and adopt an absolutely global perspective), greater importance is accorded to local non-state actors such as the Augsburg cotton industrialists, whose business activities spanned the globe but nevertheless remained rooted in their particular local context.

The methodological aim of the present study is to investigate the history of globalization through the lens of Augsburg’s cotton imports. In the context of worldwide circulation of commodities, goods, capital, and information, there is value in examining international interactions and relationships at the level of this local industry, which prospered in competitive national and international markets throughout the nineteenth century. Augsburg may have been hundreds of miles away from the ports of entry, but its mass import of American cotton meant that the city was undeniably part of a global market. Augsburg’s textile entrepreneurs also served as officials of various national and international associations, which attempted to “govern” global processes; that is to say, to control and manage them with the involvement not just of the state but also private enterprises and advocacy groups.⁸ Studying the situation in Augsburg between 1840 and 1914, the period of the first historical wave of globalization,⁹ allows us to describe how globalization unfolded in concrete terms, tracing its rhythms of acceleration and retardation rather than simply presenting the story of linear progress as so often told.

To what extent did Augsburg’s cotton businesses actively shape and precipitate the accelerated globalization processes of this period, and to what extent were they themselves passively shaped or domineered by these processes? Driven by the profit motive characteristic of industrial capitalism,¹⁰ Augsburg’s factory directors were primarily concerned with purchasing cotton as cheaply as possible. This raises a host of questions: Where did these industrialists buy cotton and with what strategies? What information did they have about global market affairs? What sort of communication network(s) did they have? In what kinds of activities were they involved? What structural factors did the local cotton industry have to deal with when importing its “white gold”? How did import practices in Augsburg develop and change over the decades as the market became more complex and increasingly susceptible to international crises, due to increasing global integration? The high volatility of cotton prices,¹¹ which depended on a whole array of unpredictable factors, constantly forced the Augsburgers to take economic risks despite their best efforts to minimize the inherent hazards.

This study may also highlight the potential of an agent-based perspective, using the cotton trade in Augsburg to illustrate how variable the levels of agency enjoyed by participants of this mercantile chain could be and how the internal logic of the global market sometimes reduced them to complete passivity.¹² The analysis explores the dialectical tensions between local and global action, micro- and macrostructures, individual episodes and structural factors, even while keeping the nation-state context in mind (there is, after all, no eo ipso contradiction between the concepts of globalization and nation).¹³

The Rise of Augsburg’s Cotton Industry in a Global Context

In the late eighteenth century, the American inventor Eli Whitney’s groundbreaking cotton gin, a machine that separated cotton fibers from their seeds,¹⁴ paved the way for the USA, with its mass monoculture plantations, to become the world’s largest cotton producer by the early nineteenth century, leaving India and Egypt far behind. Thus began the unrivaled domination of King Cotton in the southern states, interrupted only by the American Civil War. That war highlighted the inhuman price of this economic success, for the industry relied on the exploitation of African American slaves.¹⁵ While the United States is estimated to have produced just three thousand bales annually in 1790, it had surpassed a million by around 1835. Production continued rising: to almost 4.5 million by 1861, 8.5 million by 1890, ten million by 1894, and over sixteen million by 1914.¹⁶ This made raw cotton the USA’s most important export. In 1912, foreign cotton sales were worth 565 million dollars, about 26 percent of all US exports. The USA’s near-monopoly on global cotton production was reflected in a 70.37 percent share of the global cotton crop in 1911/1912.¹⁷

This surge in American cotton production was driven by high demand, especially from the European markets, which in the nineteenth century were primarily served by the British textile industry. Beginning in the late eighteenth century, Britain used its colonial power (with devastating effects) to supplant India as the world’s leading producer of cotton textiles.¹⁸ The emergence of industrial textile manufacturing ushered in a wholly new chapter in world economic history, marked by the “great divergence”¹⁹ between Europe and Asia. A flourishing industry, centered in Manchester and Liverpool, sprang up in the imperial “motherland of industrialization” and went on to dominate the global market in the first half of the nineteenth century.²⁰ The liberal idea of free trade provided the economic framework for unfettered market activity. Both in Britain and on the continent, however, the industrial revolution did not gain full momentum until the invention of steam trains and steamboats revolutionized transportation and vastly reduced freight costs.²¹ The telegraph also played a role, ushering in a communication revolution,²² only to be later superseded by the invention of the telephone.²³ Alongside these developments, which brought about a compression of space and time,²⁴ the gradual establishment of an international gold standard system facilitated the increasing integration of the world market.²⁵

While England’s cotton industry blazed the trail that global economic history would follow, in continental Europe its attentive student Germany became the largest consumer of cotton, albeit only many years further down the line.²⁶ Between 1836 and 1840, the German Customs Union imported just 8,917 metric tons of raw cotton per year; by 1871–1875 the figure stood at 116,390, and by 1912 at 506,891 metric tons.²⁷ The German cotton industry’s growing consumption is attributable not least to a sharp rise in per capita cotton consumption, from 0.74 kilograms in 1834 to 2.47 kilograms in 1877 to 6.98 kilograms in 1909,²⁸ as cotton largely replaced older fibers such as flax and wool. Although Germany continued importing Indian and Egyptian cotton in the nineteenth century, a steadily growing proportion came from the USA, with American imports accounting for 77.7 percent of total German consumption by 1911/12.²⁹

The first cotton factories were built in the Kingdom of Bavaria during the Vormärz period, thanks to the stimulus brought by the German Customs Union. Augsburg, which as a former imperial city had a long history as a commercial and financial center, took a leading role.³⁰ The sweeping generalization that Bavaria only underwent “limited industrialization”³¹ makes it easy to overlook the fact that highly industrialized, internationally connected centers of industry developed there, too, in cities such as Augsburg, which perfectly exemplifies the historical thesis that industrialization was usually concentrated in specific regions with semi-autonomous economies.³² For Augsburg, this region was Bavarian Swabia, which for a time had more active ties to Vorarlberg, Switzerland, and Alsace than to closer territories such as Lower Bavaria and the Grand Duchy of Mecklenburg-Schwerin.

In the present context, it is not necessary to delve further into the structural factors behind the rise of Augsburg’s cotton industry, which benefited from a productive combination of a ready supply of energy, capital, and commodities; a transnational transfer of knowledge, technology, and expertise; and, following the railway connection in 1840, a good transportation infrastructure.³³ Its success was also driven by an innovative circle of businessmen and bankers, who used stock shares as their main financing instrument, and willing laborers from the surrounding countryside, who submitted to the demands of the machine age. The founding of SWA in 1837 marked the start of a wave of new cotton mills and factories in the area, which continued up until the late 1860s. By the First World War, around twenty textile businesses had been established, variously producing yarn, thread, woven fabrics, and printed textiles. Although only spinning mills and sewing-thread factories purchased raw cotton, the businesses involved in further processing were equally dependent on the commodity price, which was more or less passed along through the production chain.

Prior to the First World War, some twelve thousand people in and around Augsburg depended on the local textile industry for their livelihoods, with SWA alone employing almost 2,700 workers in 1900. From around 1900 to 1908/09, SWA operated the German Empire’s largest weaving mill (with almost three thousand looms) and one of the largest spinning mills³⁴ (with 127,000 spindles; a local rival, the Stadtbach mill, had 189,000 spindles, which made it the third-largest spinning mill in the empire³⁵). In 1908/09, Augsburg accounted for 5.5 percent of all cotton spindles and 4.2 percent of all cotton looms in Germany. Given the fragmented nature of industry in the empire, the German cotton industry (whose annual cotton demand—roughly estimated—rose to over one hundred thousand bales by 1908) was thus highly concentrated in Augsburg, and the city’s cotton businesses enjoyed great success despite the disadvantageous distance from the ports. Even in the face of economic downturns, right up until the First World War they regularly paid out handsome dividends, generally between 10 and 20 percent.³⁶

Cotton as a Commercial Good

Not all cotton is created equal. Its quality varies according to staple (i.e. fiber) length, fineness, uniformity, preparation (smoothness), color, purity, and fragrance.³⁷ American producers grew two main botanical varieties: long-staple Sea Island (Pima) cotton, similar in quality to Egyptian Mako cotton, and shorter-staple upland cotton, which was much more widely planted.³⁸ While high-quality Sea Island cotton (alongside Mako cotton) was primarily used in Augsburg for sewing-thread production, the spinning mills tended to buy upland varieties, which were preferred to short-staple Indian cotton due to their quality. The Liverpool Cotton Association categorized American cotton into five territorial groupings: Sea Island, Florida Sea Island, Upland, Texas, and New Orleans. Until the First World War, these territorial designations were paired with seven quality grades: ordinary, good ordinary, low middling, middling, good middling, middling fair, and fair.³⁹ Middling Orleans, later middling American(s), was often used as a benchmark for measuring price movements on the cotton markets.

Augsburg spinners wanted to get the right grades of cotton for the types of yarn they produced, so reliable standards were crucially important. However, according to William H. Hubbard, the different exchanges and markets defined these standards differently: “For example, middling in Savannah meant one thing, and in Augusta not one hundred and fifty miles away, meant something entirely different.”⁴⁰ The Augsburg mills therefore paid close attention to cotton classes and their standardization; because the spinning machines were quite sensitive, the quality of the raw cotton needed to be as consistent as possible.

While they managed to attain a degree of assurance about the quality of cotton, the biggest headache for the spinners’ business planning was the highly volatile price of American cotton, which, in the period under consideration here, usually also determined the price of cotton from other sources. The reason this was such a concern was that commodity and energy costs often accounted for well over half of spinning mills’ expenditures.⁴¹ A confounding factor was that rises in the commodity price were not always matched by a rise in the sale prices of the finished products (yarns, woven fabrics, etc.), meaning that profit margins were squeezed.

Imports were also subject to a host of other risks, which could lead to large and unpredictable price fluctuations.⁴² Since cotton is a natural product, crop yields were at the mercy of the weather. Continuous expansion and sometimes partial reduction of cultivated acreage in the Cotton Belt in the USA also influenced prices, as did political events and crises like the American Civil War. The more integrated the global economy became over the course of the nineteenth century, the greater the effects of individual economic, banking, and financial crises on the global cotton market. Market manipulation and financial speculation also strongly affected prices. The phenomenon of stock market speculation meant that getting timely information about market affairs was a crucial challenge for the mills in Augsburg. Over the course of time, the ever more integrated global market was increasingly dominated by internationally versed market experts, whose mercantile experience allowed them to dictate the terms of cotton purchases, including in provincial Augsburg. Last but not least, cotton prices fluctuated due to the consumption of cotton textiles. Since global spinning capacity expanded in line with demand, raw cotton was notoriously scarce.

It is unclear whether the textile entrepreneurs in Augsburg were aware, when they began purchasing cotton from abroad for industrial processing in the 1830s, of just how many intermediate stages the commodity passed through between the plantation and the spinning mill in Augsburg. Depending on the period, a whole host of intermediaries and “service providers” took a cut from the sale of cotton: starting with landowners, tenant farmers, and farmhands, followed by the ginning, pressing (cotton intended for export was generally pressed twice), and baling factories. Then there were the middlemen, the trading companies and international merchants. To prepare the cotton for resale, the farmers’ products had to be classified and samples had to be taken. Both in the USA and Europe, cotton was transported by railway and sometimes by river barge. If cotton was purchased from Liverpool or another European port, that added another stage of transport. Shipping companies were responsible for transporting cotton over the sea; further fees went to harbor yards and warehouses. There were also insurance companies that insured sea and land shipments, especially against fire; the American, British, and German banks involved in financing the cotton trade; and, last but not least, various trading agents and brokers and the cotton exchanges themselves, which arbitrated any disputes over the quality of cotton. Later on, there were local cotton agents in Germany, too, who represented import companies selling raw cotton. Post and telegraph offices handled domestic communications.

Historical Phases of Augsburg’s US Cotton Imports

The history of Augsburg’s cotton imports is not just the history of the physical movement of a commodity, but also a history of communication, information, knowledge, perception, networks, trade routes, transport, trading hubs, banking and finance, and industry advocacy groups, with all these various strands converging in an increasingly globalized market. This section will seek to develop a micro-perspective on local cotton purchases with particular reference to SWA, a major firm whose archives have been preserved largely intact in the Augsburg City Archives. These archives not only allow us to reconstruct SWA’s well-documented import activities, but also provide instructive insights into contemporary perceptions of globalized economic affairs by the company management. To provide an expanded perspective on the regional cotton industry, references are also made to reports of the Chamber of Commerce for Swabia and Neuburg (Handels- und Gewerbekammer für Schwaben und Neuburg), which was dominated by Augsburg textile industrialists.

The Early Years up to 1860

The first cotton purchased by SWA (in 1837, three years before the mill actually began production) came not from the USA, but from Egypt. This purchase is of interest because it illustrates certain key structural features of the contemporary cotton trade. The (then) Austrian city of Trieste, at the northern tip of the Adriatic Sea, was the central trading place for Egyptian cotton. SWA appointed a businessman and cotton trader there, Ignaz Hagenauer,⁴³ as their representative, issuing him precise instructions by mail about their purchasing interests and intentions. SWA’s speculative enquiry to Hagenauer reveals only limited knowledge of the Trieste cotton market, which may have been acquired via personal contacts or the press. To make up for the gaps in its knowledge, SWA requested “a comprehensive report on your cotton market.”⁴⁴ Not long afterward, the company sent the businessman Gustav Frommel from Augsburg to Trieste as their agent for cotton purchasing, so as to ensure better representation of its interests. Frommel kept an “attentive eye on the local cotton market”⁴⁵ and apparently also made purchases on SWA’s behalf. It was probably this special knowledge of the cotton trade that secured Frommel’s later promotion to SWA’s commercial director on March 30, 1839. In the pre-telegraph age, SWA entrusted people like Frommel to represent the company’s interests in person. This sort of personal connection would continue to play an important role in future international business transactions, despite the revolution in communication brought about by the telegraph. It is no longer possible to establish whether SWA’s first shipment of cotton went via Venice or directly from Trieste to Augsburg. What is known is that a businessman from Innsbruck, Martin Tschurtschenthaler, transported the cotton bales by horse and cart over the Alps and from there via Füssen to Augsburg in a journey lasting around a month.

SWA continued to buy most of its cotton from Egypt until the end of the 1830s. In the 1840s, it made its first purchases of cotton from the United States. While Indian cotton was mainly imported through London at that point, American cotton was sourced from ports such as Rotterdam, Le Havre, and, above all, Liverpool, which, with its enormous cotton warehouses, was long the world’s leading hub for trade in the coveted commodity and served as the barometer for cotton prices right up to the age of the German Empire. English and German spinning mills had very different buying strategies. While the English mills clustered in and around Manchester relied on weekly “spot sales” in nearby Liverpool to cover their requirements, German cotton businesses were forced to buy ahead, usually needing enough stock to last for months or even a year. This had two significant consequences for the German spinning mills’ business planning and costings: Firstly, buying ahead tied up a large amount of capital, which meant they lost a lot of interest on money that could not be invested elsewhere. Secondly, given the large quantities of cotton involved, the mills had to approach purchasing decisions with great caution, as minimal differences in price became very expensive when multiplied. This meant it was vital for SWA to closely monitor the English and then also the American markets.

To this end, SWA corresponded extensively with foreign trading companies in Rotterdam, Le Havre, and Liverpool, who kept the Augsburg management updated on market trends.⁴⁶ SWA’s correspondence reveals a growing awareness of the complex global market. One example can be seen in an exchange from late November 1842 with two traders in Liverpool, William Preller and Hermann Frommel, about the current prospects for British exports to China and India, which would relieve pressure on the German market.⁴⁷ That said, in the 1840s, the SWA managers still sometimes displayed ignorance about the commodity from the far-off USA, despite their network of correspondents. For instance, in a letter dated August 20, 1844, SWA’s representative remarked, blissfully unaware of meteorological conditions in the American Cotton Belt, that “we have observed that the American cotton harvest coincides exactly with the grain harvest in Germany, which this year was exceptionally abundant, so that we expect to be able to buy at even lower prices next spring.”⁴⁸

Despite occasional naivety, in the early years SWA proved to have a knack for choosing the right time to buy American cotton cheaply, though it sometimes still had to weather price spikes. In 1847, for instance, a poor harvest in the USA drove up commodity prices by 50 to 60 percent, meaning SWA had to spend around 93,000 gulden more on cotton than in the preceding year.⁴⁹ Even a fall in cotton prices could be bad news, since, if the company had failed to buy cotton at the lowest price, the losses would have to be written off in the annual accounts. In the early decades, purchasing decisions were generally made on the basis of cotton samples (and hence on the basis of very specific batches) sent from the import markets of Liverpool or Le Havre.

In 1840, SWA purchased just 34.9 metric tons of American cotton; this rose to 271 metric tons by the following year, and from 1845 to 1860 oscillated between 500 and 600 metric tons, peaking at 604 metric tons in 1857 (see chart 1). From 1843 to 1852, the Augsburg company purchased its cotton exclusively from the USA. In 1853, it began importing small quantities of cotton from India, but this accounted for barely more than 10 percent of total annual consumption prior to the American Civil War.

During the early years, when the companies from Augsburg bought cotton in Liverpool, this normally involved not just the trader who actually imported the cotton, but also a buying and a selling broker, each with their own fees. For this reason, as the decades passed, it became increasingly imperative for the German spinners to free themselves from the British-dominated Liverpool market.⁵⁰

SWA’s initial purchases in the 1840s were of cotton already stored in European warehouses, but, in late March 1847, the company decided to buy the commodity directly from the USA for the first time (albeit with an importer still acting as intermediary).⁵¹ In general, only companies with lots of capital could afford to import cotton directly, due to the many uncertainties involved. Two considerations spoke in favor of direct imports: Firstly, it eliminated the commission and brokers’ fees charged at the European ports. Secondly, a direct link to the country of origin gave better access to the desired cotton grades, which were often unavailable in Europe. SWA was ahead of the curve with this innovative buying strategy, which many other German spinning mills only adopted decades later.

After the opening of the Augsburg–Munich line in 1842, cotton was increasingly transported by railway. A rail line between Augsburg and Nuremberg followed in 1849, and two years later the Ludwig South-North Railway connected Munich to Berlin via Hof. In the 1850s, the railway network expanded right across the continent, allowing cotton to be transported by rail all the way from the Atlantic entry ports. From 1851 onward, SWA increasingly relied on the telegraph for its international communications, alongside traditional postal correspondence. In 1866, the transatlantic telegraph cable was laid, shortening the time needed to relay messages from days to a few minutes and revolutionizing intercontinental business dealings.⁵² The cable removed barriers to interaction, and made world trade easier and much faster.

Domestic politics hindered the development of business in German territories during the revolutions of 1848/49, while in the 1850s it was international events that were unfavorable, as wars and crises drove up food prices and dampened consumer spending. The Crimean War (1853–1856) significantly drove up the price of cotton, with sharp fluctuations rippling through to Augsburg in 1855. The cotton price rose rapidly again after the Treaty of Paris in 1856, soaring from 5.5 to 9.5 pence per English pound (lb), before falling back to 5.5 pence the following year. The global economic crisis that began in the USA in August 1857⁵³ spread to Europe in fall of that year and caused a “universal trade crisis.”⁵⁴ Augsburg companies that had concluded large sales of textiles early enough reaped a handsome profit. SWA, for instance, achieved record profits that year of almost 270,000 gulden. In 1859, the Second Italian War of Independence caused a “slump in business”⁵⁵ even north of the Alps, prompting SWA to cut working hours between May and August. In 1860, an exceptional cotton harvest in the USA resulted in very low prices; of the almost six hundred metric tons processed by SWA that year, no less than 584.6 came from America.

The Impact of the American Civil War (1861–1865)

While the Augsburg cotton companies weathered the crises of the 1850s relatively well, the American Civil War, which broke out in 1861 over the issue of slavery, posed new and unfamiliar challenges for the local textile industry.⁵⁶ The blockade of Confederate ports ordered by President Abraham Lincoln brought cotton exports to a virtual standstill,⁵⁷ with grave consequences. The Lancashire textile industry, which depended almost exclusively on American cotton, was hit especially hard; the “Cotton Famine” resulted in mass unemployment and the closure of many companies.⁵⁸ The small quantities of American cotton that were available rose dramatically in price, with the cost of Middling Americans in Liverpool increasing almost fivefold from 6 1/4 pence per English pound (lb) in 1860 to 27 1/2 pence (briefly peaking at 31 pence) in 1864.⁵⁹

What effect did the cotton scarcity have on the textile industry in Augsburg? Initially, the companies’ policy of buying large quantities ahead of time reaped dividends; in the first year of the war, they were able to continue production without any significant cutbacks. However, the Chamber of Commerce for Swabia and Neuburg gave a far more critical assessment of the following year, 1862:

The continuation of the American Civil War, which has led to steady price increases of many commodities, especially cotton, is weighing heavily on German industry, and its disruptive influence is especially palpable in our region, which has many cotton mills.⁶⁰

If they wanted to continue production at the same level, these businesses had to source cotton from outside of the USA. Like much of the industry, SWA mainly attempted to make up for the shortfall in American cotton by buying from India. Imports from the Indian subcontinent shot up from thirteen metric tons in 1860 to 254 metric tons in 1865 (see chart 1). Other replacement cotton was sourced from Italy and the Levant. During the war, SWA managed to more or less satisfy the demand, with the biggest shortfall coming in 1863, when supply fell by around 16 percent compared with prewar levels. However, purchasing cotton from other countries created serious problems for the spinning machines, which had been precisely calibrated for American cotton. The short-staple Indian cotton could only be used to make lower-quality textiles, and overall production declined. The Stadtbach mill did better than SWA at sourcing replacement cotton, and, with its increased spinning capacity, even managed to increase its cotton consumption from 12,257 bales in 1860 to 15,610 bales in 1865.⁶¹ However, this probably represented an exception rather than the rule in Augsburg.

Some local companies, meanwhile, became veritable war profiteers, using a portion of their abundant cotton reserves for highly profitable speculation rather than actual production. The wildly fluctuating yarn market also offered frequent opportunities to buy low and sell high.⁶² Both the Stadtbach mill and SWA witnessed exceptional profits between 1861 and 1863. Paradoxically, SWA achieved its “highest ever”⁶³ profits to date in 1862, when the price of American cotton doubled relative to the previous year. These results were dependent, however, on temporary market conditions, and when the pendulum swung the other way in 1864, the Stadtbach mill was forced to cut back its production. Hopes of economic recovery were not glimpsed until 1865, “when the great political drama in North America came to a temporary conclusion.”⁶⁴

What lessons did the Augsburg cotton companies take from the American Civil War? Being forced to branch out to other sources of cotton created a general awareness that the American monopoly was no longer an absolute given. SWA continued buying a lot of Indian cotton even after the American Civil War. The Chamber of Commerce for Swabia and Neuburg expressed concern about the future of cotton production in the American South following the abolition of slavery:

We are not yet able to precisely assess […] what effect the emancipation of slaves that has now begun will have, and how their willingness to cultivate cotton as free laborers will affect cotton production in the southern states of North America this year and in the years to come.⁶⁵

No evidence has survived of what spinners in Augsburg thought about the connection between cotton production and slavery. However, the Augsburger Lassalleaner, an early social democratic newspaper founded in March 1864, was sympathetic to President Lincoln and his commitment to “the great task of abolishing slavery.”⁶⁶ Apart from that, there are scattered references in the Augsburg press to slavery, which was closely tied up with cotton cultivation.⁶⁷

The USA recovered slowly from the devastating civil war, which had placed its cotton industry on a new and initially very fragile footing. It took until 1879/80, almost two decades, for American cotton exports to return to prewar levels.⁶⁸ Although slavery had now been abolished, cotton production remained reliant on African American laborers, who still lacked full rights and independence. Back in Germany, the Austro-Prussian War of 1866 briefly had a negative impact on the Augsburg textile industry, followed by a period of exceptionally good business that allowed SWA to pay out lavish dividends. The next slump did not come until the Franco-Prussian war in 1870, when production was cut back.

The Emergence of National Advocacy Groups: From 1870 to the Turn of the Century

The founding of the German Empire in 1871 is generally associated with the economic boom of the Gründerzeit. But the unification of the empire was rather less of a blessing for the German textile industry, since the incorporation of Alsace-Lorraine and its strong textile industry greatly increased domestic competition. The total number of cotton spindles and looms in Germany rose by 56 and 88 percent, respectively. The expansion of spinning and weaving capacity in the preceding years had outstripped growth in consumption, which led to unprecedented competition at the national and international levels. For the first time, the problem of overproduction reared its head.

The Panic of 1873 triggered a worldwide economic depression, and also brought home once again the enormous risks the rapidly growing global market posed for Augsburg’s industrialists.⁶⁹ There was growing opposition to free trade, with a particular focus on establishing a counter to the economic power of Britain, which dominated global textile production thanks to the industrial center of Lancashire and the influential cotton market in Liverpool. Augsburg’s local chamber of commerce therefore published a statement on German trade and customs policy that called—“with particular reference to the textile industry in our region”—for “the cosmopolitan trade policy pursued hitherto, which has driven the country to impoverishment and ruin thanks to decades of unfavorable trade balances, to be replaced by a truly national trade policy dedicated solely to German interests.”⁷⁰ These calls for Germany to impose limits on a global economic liberalism that mainly benefited Britain (due to its considerable geographic advantages) must be understood as a national response to an unequal international playing field.⁷¹ In the challenging economic climate, German cotton entrepreneurs banded together in various institutions and organizations to ensure better representation of their economic and political interests. Augsburg textile industrialists were at the forefront of these processes of institutionalization.⁷²

Association of South German Cotton Industrialists

The founding of the Industrial Exchange Association (Industriebörsenverein) in Augsburg in 1859 paved the way for the Association of South German Cotton Industrialists (Verein süddeutscher Baumwollindustrieller, VSBI), which was formally constituted on July 4, 1870. The association was intended to represent the interests of the cotton industry of Bavaria, Württemberg, Baden, and parts of Saxony with respect to foreign trade, customs, economic regulation, social policy, and the development and regulation of transportation (in particular railways). As well as reaching agreements on influencing the market, limiting production, and regulating prices, one of the new association’s functions was the compilation of statistics on cotton.⁷³ It also cooperated with national and international cotton industry organizations. If the founding of the VSBI is viewed in the context of the global textile chain, which at that time spanned from overseas cotton farming to domestic sales of yarn and woven fabrics, then it can be understood as an attempt to better manage the international trade flow, initially within the association’s immediate sphere of influence in Germany, and thereby amplify the agency of the textile industrialists involved in the association. For a long time, Augsburg-based companies called the shots in the VSBI.⁷⁴ Theodor Haßler (fig. 2), the director of the Stadtbach mill from 1868 to 1889, served as vice president of the VSBI for ten years and then as president from 1882 to 1899.⁷⁵ Under his leadership, the VSBI relocated its headquarters to Augsburg. Ferdinand Groß (SWA director from 1893 to 1907) served as president of the VSBI after Haßler’s tenure, while Albert Frommel (SWA director from 1872 to 1893) represented the association on the permanent committee of the German Trade Association (Deutscher Handelstag).⁷⁶

The VSBI was especially active in campaigning against the imperial government’s free trade policy, and managed to successfully mobilize public opinion. This paved the way for the establishment of the Central Association of German Industrialists (Centralverband deutscher Industrieller, CVDI),⁷⁷ which was founded in Berlin on February 15, 1876. Haßler was initially appointed vice president of the CVDI, and then in 1880 president. Under his influence, Otto von Bismarck decided, following the severe economic depression of 1877/78, to move away from the free trade policy that the empire had followed until that point. Preparations for this change of direction, which was formalized by the Customs Tariff Act of July 15, 1879, were made by the Imperial Inquest on Behalf of the Cotton and Linen Industry (Reichs-Enquete für die Baumwollen- und Leinen-Industrie) set up in 1878, on whose committee Haßler served and which consulted other Augsburg factory directors as industry experts.⁷⁸

Direct Imports

The inquest committee is of particular interest for the present study because it provides considerable insight into the import activities of the Augsburg cotton companies (as well as German cotton companies more generally), which continued to rely primarily on American cotton. According to the experts the inquest consulted, German spinners were, at that point in time, buying a far greater proportion of their cotton (between 30 and 60 percent of their annual requirements) directly from the countries of production than they had prior to the 1870s.⁷⁹ One of those surveyed was Prosper de Rudder, the director of the Senkelbach spinning mill in Augsburg, who remarked, “In 1877, we bought most of our American, East Indian, and Egyptian cottons from the countries of origin, and, due to the unfavorable market conditions, only a small proportion from England and other foreign and German markets.”⁸⁰ Those looking to import cotton directly from America had a choice between the markets of New Orleans (Louisiana), Galveston (Texas), Mobile (Alabama), Savannah (Georgia), and Charleston (South Carolina). The transit port was generally Rotterdam or Bremen.

De Rudder’s remark reflects a fundamental shift in the buying policy of German cotton spinners, who were increasingly reducing their dependency on the Liverpool market. This tendency can also be seen in the declining imports of cotton from Britain to Germany after the American Civil War, which fell nearly 70 percent between 1867 and 1877, from 919,782 to 284,207 centners. De Rudder gave a rundown of the different fees levied on cotton purchases at the main European markets. While Liverpool demanded 3.5 percent of the purchase price, Le Havre and Bremen charged just 2.75 percent.⁸¹ A. Dollfus, an Alsatian cotton spinner, was blunt in his criticism of British commerce: “The English want to sell cotton at far more than it’s actually worth.”⁸²

Direct imports, on the other hand, generally offered a favorable purchase price; in 1877/78, this price normally already included all fees,⁸³ which came to around 5 percent. Importing cotton directly also opened up a far greater choice of varieties and grades. Since one area SWA had chosen to focus on was “producing special grades,” the company felt “compelled to only use very good raw material, and in some source countries this can only be procured at the places of production when the harvest is coming in.”⁸⁴ Since the cotton grades required by the Augsburg businesses were either not available at all at the European markets or “only at exorbitant prices,” SWA began “regularly buying up a whole year’s supply” of “certain varieties” from the USA.⁸⁵ This was a major financial challenge, even for the wealthiest companies,⁸⁶ and SWA, despite its solid financial footing, sometimes had to take out large loans of up to a million marks to buy ahead in this way.⁸⁷ Companies with less capital were unable to buy direct from overseas for a long time. Moreover, having so much working capital tied up in this way meant German companies often responded slowly and inflexibly to changes in cotton prices or demand.

Payments to the USA were made using “sight drafts.”⁸⁸ Sight drafts with a term of sixty days were standard for cotton imported directly from the USA.⁸⁹ The challenge for the Augsburg spinners, and all other German mills, was that these drafts, which US exporters insisted on, could only be drawn at British banks for a long time.⁹⁰ This meant that payments for cotton deals had to be made abroad, and businesses in Augsburg had no choice but to conduct their transactions in pound sterling through British banks, generally in London, which earned a cut off each payment. Dealing in foreign currency also entailed an exchange loss. Added up, these factors put German businesses at a structural disadvantage compared with their international competitors. The experts interviewed by the inquest frequently criticized the lack of trust shown to German banks and the German currency by exporters from the American South.⁹¹

The Bremen Cotton Exchange

Although German spinners were long forced to import cotton on less favorable terms than their English counterparts, the growth in direct imports from the USA was a first step toward emancipation from British hegemony. Heinrich Spörry, who owned a spinning mill in Mühlhausen, estimated that in 1878 German spinners paid 11.52 marks more per 100 kilograms of American cotton than English spinners.⁹² The cost of shipping imported cotton from Liverpool to Augsburg at that time was 5.15 to 5.68 marks per 100 kilograms, which was far more expensive than the three to four marks that textile-producing cities along the Rhine had to pay.⁹³

If the German cotton industry wanted to compete successfully on the international market despite these disadvantages, it needed to liberate its European trading activities from the dominant influence of the British market. This could be achieved only through institutional and physical expansion of a German port for American cotton imports. The obvious candidate was Bremen,⁹⁴ which was already active in the import business. There was growing interest among merchants there in attracting trade away from Liverpool, Le Havre, and Rotterdam.⁹⁵ They wanted to make sure, furthermore, that they were not left entirely empty-handed by the increasing tendency for German spinners to import directly and cut out the middlemen. A new institution, the Bremen Cotton Exchange, promised a solution to this problem.

The basis for the exchange was laid in 1872 with the foundation of the Committee for the Cotton Trade (Comité für den Baumwollhandel), which brought together importers, traders, and brokers. Regulations governing the Bremen cotton trade (the Bremer Baumwoll-Usancen, replaced in 1875 by the Bestimmungen für den Bremer Baumwollhandel)⁹⁶ established legal certainty and standards not dependent on the British market; Bremen now adopted new standard samples for the different cotton varieties rather than relying on those used in Liverpool. This independent classification and arbitration of the quality, and hence the value, of imported cotton was a key factor behind Bremen’s meteoric rise as a trading hub. In 1877, merchants there founded the logistics company Bremer Lagerhaus-Gesellschaft with a view to expansion of the cotton trade. Later that same year, the Bremen Cotton Exchange itself was founded. Like its precursor, the Committee for the Cotton Trade, the exchange brought together a variety of players in the cotton market: importers, brokers, agents, freight carriers, and bankers. The exchange’s breakthrough as an internationally competitive trade association came when the German cotton industry came on board. The first of the cotton mill associations to join was the VSBI, in 1886. Its then president, the Augsburg industrialist Haßler, was in favor of establishing closer ties with “the maritime trade and the rest of the world,”⁹⁷ and welcomed the invitation from Bremen to bring the south German textile industry “a step nearer to the sea.”⁹⁸ Striking an almost imperialist tone, he declared that “We also want to ensure that Bremen, as a German port, attains the status as a cotton market that it deserves.”⁹⁹ Five other German cotton spinning associations followed the example of the VSBI, and similar organizations from Austria (1894) and Switzerland (1906) later followed suit. Haßler himself was elected to the expanded committee of the Bremen Cotton Exchange as the representative of the VSBI, and SWA Director Groß later served on the committee as well.

Despite the name, the Bremen Cotton Exchange was not an exchange in the strict sense; that is to say, it was not a cotton-trading institution in its own right, with fixed trading hours, listings, and stock trader meetings.¹⁰⁰ It was merely an association that offered stakeholders in the cotton market an organizational framework to facilitate their business and alleviate legal uncertainties.¹⁰¹ Obtaining legal certainty was deemed especially important given the increasing direct imports of cotton from the USA, as maintaining the consistent quality of the supply was a great challenge. An independent quality check with its own standards, a recognized arbitration process, and tribunals to decide on disputes secured Bremen’s rise to a new European cotton center. The exchange helped establish a German passage alongside the other transatlantic trade routes and created a vital new hub in the expanding global market. The exchange, an unlikely association of traders and spinners, can only be properly understood in the context of the desire to reduce Germany’s dependence on Britain. Buyers and sellers only put aside their economically opposing interests for the sake of greater collective trading power. The Bremen Cotton Exchange represented its members beyond Germany’s borders at international conferences on regulation of the cotton trade.¹⁰²

The success of the Bremen Cotton Exchange, which almost exclusively imported American cotton, is documented by the steady rise in import figures after its initial founding as the Committee for the Cotton Trade, from 157,630 bales in 1870 to 206,300 in 1875.¹⁰³ The boost that the exchange received when the German cotton spinning associations joined in 1886 can be seen in the rise from 457,700 to 658,400 bales between 1885 and 1887. When it surpassed 493,000 bales in 1886/87, Bremen overtook Le Havre as the continental port with the highest volume of cotton imports. Imports passed the million bales mark for the first time in the first half of the 1890s, and peaked in 1911/12 at 2,870,000 bales. Shortly before the First World War, Bremen’s cotton imports rivaled Liverpool’s, with the Hanseatic port supplying Scandinavia, Poland, Russia, Austria, Switzerland, and other countries.

The actual business of buying cotton was dealt with by specialist import companies, which were either founded in Bremen or opened branches there as the Bremen Cotton Exchange became increasingly established on the continental European market. These companies, which were often represented in the centers of the German spinning trade by local commercial agents, were the intermediary between the buying spinners and the selling exporters. Between 1876 and 1913, address directories for Augsburg list a constant tally of around ten cotton agents,¹⁰⁴ who represented not just German import companies but also British and American ones, who were equally eligible to join the Bremen Cotton Exchange.

Dealing with Uncertainty: SWA between 1870 and 1900

A micro-perspective on SWA shows that, despite the Panic of 1873, competing tendencies towards free trade and protectionism, and strong competition from Britain, and many economic ups and downs, there was an enormous expansion in the production of cotton textiles in Augsburg between 1870 and 1900. While SWA’s annual cotton consumption stagnated in the first half of the 1870s between 670 and 758 metric tons, this figure rose markedly after 1876 (908 metric tons), and more than doubled in the course of the 1880s (1880: 1,213 metric tons; 1889: 3,116 metric tons); by 1900, cotton consumption had soared to 5,351 metric tons (see chart 2). In addition to the American cotton it favored, SWA also used a lot of Indian cotton. Buying cotton from India (which between 1883 and 1885, when SWA’s need for cotton rose sharply, made up over 50 percent of its total consumption) made the company less dependent on American imports alone. However, when American cotton prices were low, SWA purchased more cotton from the USA, as in 1899 and 1900, when the company only sourced around 10 percent of its annual cotton requirements from outside America.

Analyzing the development of American cotton prices between 1870 and 1900 reveals a steady decline as the market recovered from the Civil War, from 10 9/16 pence per English pound (lb) of Middling Americans (by Liverpool classification) in 1871/72 to a historic low of 3 13/16 pence in 1898/99.¹⁰⁵ Although this fall in prices appears linear from a longer-term perspective, in the interim SWA had to wrestle with constant price fluctuations. It attempted to buy at the cheapest point in time, always hoping that prices would not fall further so that it would not have to write down any purchases that had already been made in the annual accounts. It was not uncommon to wonder, as in an 1885 report, “how much further the commodity will depreciate.”¹⁰⁶

If prices rose again, this created an opportunity for profit; in 1880 SWA Director Frommel laconically remarked that the company’s profits were attributable not to its production “but solely to fortunate speculation in cotton.”¹⁰⁷

The SWA management was constantly seeking to get a handle on the volatile cotton prices, often deploying ingenious reasoning. The uncertainties included both objective factors, like the actual cotton yields, and subjective ones, like having better information, which allowed some spinning mills to predict movements on the market faster than their competitors; market manipulation also contributed to the uncertainty, as will be discussed further below. Given the geographic remoteness of the American cotton plantations, it was impossible to observe them directly; SWA had instead to utilize all the information it could get from its communication network to try and accurately estimate crop yields and make purchasing decisions accordingly, since the expected yield of the upcoming harvest also affected the value of remaining stock from the previous season. If a poor harvest was followed by a good one, an abundance of cotton would drive down prices. Two good harvests in succession, on the other hand, as in 1890/91 and 1891/92, threatened to “ruin business” altogether.¹⁰⁸ As Frommel reported to a general meeting of SWA, “This business year […] has been one of the most calamitous for our industry in its whole existence. Even the wars of 1870 and 1866, the crises of 1859 and 1857, yes even the great revolutionary year of 1848 had less deleterious consequences, because a steep fall in prices was followed by a recovery.”¹⁰⁹ The Chamber of Commerce for Swabia and Neuburg likewise pinned most of the blame for the worst financial results “for as long as the cotton industry has existed in our region” on the “gigantic harvest” of 1890/91 and the “monster harvest” of 1891/1892.¹¹⁰

Accurate predictions of market fluctuations were vital, and so companies in Augsburg consulted up-to-date yield estimates, weather reports warning of storms or a “killing frost,”¹¹¹ and predictions of insect plagues—all of which could also be tainted by misinformation, which competitors sometimes even deliberately spread. During this period, the Augsburg companies got their latest news about the precious commodity via telegraph, telephone (SWA was hooked up to the network in 1886¹¹²), newspapers, and specialized publications, such as Alfred B. Shepperson’s Cotton Facts (New York),¹¹³ John Jones’s Handbook for Daily Cable Records of American Cotton Crop Statistics (Liverpool),¹¹⁴ and the various reports by the influential Neill Brothers.¹¹⁵ The Bavarian spinners were also kept informed by their contacts in the main European cotton centers, and received the latest harvest forecasts from the Augsburg cotton agents. Finally, the Bremen Cotton Exchange and VSBI published statistical records of past cotton harvests and prices, with which companies could gain a basic grasp of the volatile cotton market.¹¹⁶ Compared with the naivety of the pre-1848 years, Augsburg’s cotton industrialists were now far better informed about production conditions in the USA.¹¹⁷

Despite the perils of unexpected price drops, SWA hoped for cheap cotton prices in the long run “due to the great expansion of cotton cultivation in the United States in recent times.”¹¹⁸ When the Augsburg cotton spinners were caught off-guard by the bumper harvest of 1891/92, there were suspicions “that this result is likely attributable to an expansion of cotton plantations that we were unaware of and that the Americans in all probability concealed from us.”¹¹⁹ However, when the American cotton farmers later attempted to shift cotton prices in their favor by reducing the area under cultivation, they came in for criticism from SWA Director Groß.¹²⁰

The many imponderable factors that determined cotton prices were exacerbated by deliberate speculation on the cotton exchanges that began to spring up in the 1870s, especially those, like the exchanges in Liverpool, New York, New Orleans, and Le Havre, that allowed trading in futures.¹²¹ Futures, which could be obtained equally quickly in the USA and Europe thanks to the transatlantic telegraph, initially served the very practical purpose of allowing companies to hedge their own cotton purchases or sales against price volatility.¹²² However, while some used them to protect their businesses, others used them as a very profitable form of financial speculation; SWA Director Frommel reported that there had been “unprecedented speculation in American cotton in Liverpool” between July and September 1881.¹²³

Futures trading in a natural commodity always brought with it the risk of market manipulation. SWA, with its cautious buying policy, long steered clear of futures, with the supervisory board chair, Paul Schmid, declaring to the new director, Groß, in 1893 that “the futures business” could “no longer be countenanced.”¹²⁴ Observers in Augsburg took a dim view of the growing stock market speculation in the final years of the nineteenth century, which saw investors betting on whether cotton prices would rise or fall. The Chamber of Commerce for Swabia and Neuburg first voiced general concerns about the issue in 1897: “It makes matters very difficult for good, sound industry that cotton prices are no longer determined by supply and demand, but primarily by the manipulations of speculators in New York and Liverpool.”¹²⁵

Stock market speculators were also accused of manipulating the media, going so far as to spread fake news about cotton growth or weather conditions:¹²⁶

Through their agents in Germany, especially Hamburg, they influence the newspapers. The newspapers are offered cable reports from New York, which they reprint in the belief that they are doing their readers a great service, without realizing how much damage they are doing to business and how dubious their sources are.¹²⁷

The local chamber of commerce was especially appalled that Augsburg’s newspapers also allowed themselves to be used for these sorts of manipulations, which “have had a disruptive effect on virtually the whole German industry.”¹²⁸ Systematic stock market speculation, which caused rapid price fluctuations previously unseen in the cotton trade, made the already difficult trading conditions even more challenging.¹²⁹ And so the chamber took some pleasure in the news of the collapse of “exorbitant speculative enterprises in New Orleans”¹³⁰ in 1895 and of “New York speculation”¹³¹ in 1900.

It was not just speculative market risks that affected cotton prices, but also social and political events. For instance, a strike by English laborers in Lancashire prompted SWA Director Groß to hope for “lower cotton prices,” which he planned to “take advantage of by buying up cotton”;¹³² however, this hope was not fulfilled. The Augsburg cotton industry always kept a close eye on its British rivals, who had various competitive advantages and tended toward overproduction. Whenever British sales to India and the rest of Asia slumped, this exposed the German market to the risk of having to compete on unequal terms with exports of textile products from Britain.

Toward the end of the nineteenth century, Augsburg’s textile industrialists were far more sensitive to the cotton market’s entanglements in global political and economic affairs, which increasingly eluded simplistic notions of cause and effect. As their horizons widened, they became aware of a complex cluster of global economic factors that could affect the price of cotton even from the other end of the world, as with the Sino-French War of 1883.¹³³ The political conflicts were frequently accompanied by global banking and economic crises. For instance, in 1893 the chamber of commerce noted the impact on cotton prices of “unfavorable news from America” and “payment defaults in Liverpool and Australia.”¹³⁴ The same year also saw prices affected by a dangerously “falling silver price,”¹³⁵ which, in combination with dwindling gold reserves, sparked a panic on the US capital markets in May, resulting in the collapse of many American banks and businesses. Consequently, even as it looked ahead to 1894, the chamber of commerce complained of “the still unsatisfactory business conditions in the United States.”¹³⁶

Professionalization of Augsburg’s Industrialists

Keeping pace with the increasing demands of the global cotton market required more specialized personnel. While in the first half of the nineteenth century Augsburg’s leading businessmen learned their trade in Austria, Italy, and Switzerland,¹³⁷ in later decades prospective factory directors headed to the key European markets for American cotton.¹³⁸ Groß and Waibel became acquainted with the workings of the international cotton trade in Le Havre, Bremen, and Liverpool,¹³⁹ while Otto Lindenmeyer, who succeeded Waibel as SWA’s director in 1911, gained international experience in Lausanne, Basel, Liverpool, and the Balkans, where he represented English spinning mills.¹⁴⁰
Frommel’s formative years took him to Havana. Schmid, the influential longstanding chair of the SWA supervisory board (fig. 3), began his career in Geneva, London, and Frankfurt, while his uncle, Paul Schmid, Sr., worked in New York.¹⁴¹ Consequently, by the time of the German Empire, SWA’s senior ranks were filled with quintessential international businessmen, fluent in multiple languages and au fait not just with the transatlantic markets but also, thanks to the trade in Indian and Egyptian cotton, those of Asia and Africa.¹⁴²

The Emergence of International Advocacy Groups: From 1900 to World War I

As the twentieth century dawned, the globally expanded horizons of Augsburg’s textile industrialists were increasingly reflected in the language that they used. The chamber of commerce’s annual reports were now sprinkled with terms like “global economy” (Weltwirtschaft),¹⁴³ “world peace” (Weltfriede),¹⁴⁴ “global consumption” (Weltverbrauch),¹⁴⁵ the “state of the world” (Weltlage),¹⁴⁶ “global market conditions” (Weltkonjunktur),¹⁴⁷ and “world market” (Weltmarkt).¹⁴⁸ SWA paid growing attention to total “global demand” (Weltbedarf)¹⁴⁹ for cotton and to “global consumption” (Weltkonsum)¹⁵⁰ of the commodity. This rhetoric of “world” and “global” was reflected in practice by a new, almost cybernetic feel for cotton demand, the probability of satisfying that demand, and resultant prices, with global demand always calculated based on expected or actual American crop yields.

The main challenge for the market was that global demand for cotton was rising faster than production.¹⁵¹ Conditions on the global market were exacerbated by the vast rise in US domestic consumption; by 1895, America had a spinning capacity of over sixteen million spindles. In the face of these pressures on the supply of cotton, Augsburg’s factory managers were constantly engaged in making more or less hypothetical estimates of cotton prices for the next American harvest.¹⁵² The local spinning mills incorporated every new piece of meteorological or statistical information into their calculations, especially official information published by American government bodies such as the Department of Agriculture’s Weather Bureau and its Division of Statistics and, later on, the Department of Commerce and Labor’s Census Bureau (founded in 1903).¹⁵³

Augsburg’s demand for cotton also rose significantly in the years leading up to the First World War. SWA’s annual consumption rose from 5,351 metric tons in 1900 to a peak of 7,277 metric tons in 1913. The proportion of Indian cotton ranged from between 20 and somewhat more than 30 percent. Whereas the tail end of the nineteenth century had seen a linear decline in the price of cotton, which fell as low as 3 13/16 pence per pound (lb) in 1898/99,¹⁵⁴ it began to rise again in 1900, albeit with far greater fluctuations than before, at points temporarily almost tripling in price.¹⁵⁵

New Heights of Stock Market Speculation

The constant fluctuations of cotton prices in the years leading up to World War I were largely the result of speculation on the New York Mercantile Exchange, which rose to unprecedented heights in the new century.¹⁵⁶ The chamber of commerce’s annual reports complain nonstop about the often turbulent cycles of bull and bear markets. The author of one report from early 1901 was incensed by a “cotton corner in New York” that “drove the price of cotton up to twelve cents.”¹⁵⁷ Alongside rampant stock market speculation, the growth in US domestic demand meant that, despite the expansion of American plantations, the USA was able “to dictate prices for the cotton-consuming world.”¹⁵⁸ There was much contemporary criticism of a “New York bull clique”¹⁵⁹ that temporarily ramped up cotton prices in 1902/03, creating great “uncertainty about whether there would be a sufficient supply of cotton to meet global demand.”¹⁶⁰ In 1904, there was then an “unbridled bullish movement,”¹⁶¹ which critically threatened the interests of the European cotton industry.¹⁶² This rapid price rise was associated mainly with the “cotton king”¹⁶³ and “arch-speculator”¹⁶⁴ Daniel J. Sully. Beginning in late 1903, Sully “bulled” the price of cotton up to as high as seventeen cents,¹⁶⁵ resulting in “heavy losses upon spinners and […] the closing of many mills.”¹⁶⁶ Only after the spectacular collapse of “the bull clique’s leading member”¹⁶⁷ on March 18, 1904, did the price gradually come down again. A price plunge at the end of the year made the European dependence on the speculative American market all the more starkly apparent. Charles W. Macara, president of the influential British Federation of Master Cotton Spinners’ Associations, complained in 1904 that the rise in American cotton prices had brought the vast industry to the brink of complete paralysis.¹⁶⁸

In Augsburg, meanwhile, industry experts were increasingly doubtful that they could rely on information about cotton from the USA. In September 1903, Schmid, the chair of the SWA supervisory board, expressed anger at the “arbitrariness of American speculators” who “even manipulate news about the state of the harvest as they see fit.”¹⁶⁹ In a review of 1904, the chamber of commerce observed that claims about the enormous damage to the cotton harvest caused by the feared boll weevil likewise distorted the facts.¹⁷⁰ The chamber was critical not just of private speculators, but now also of reports from official sources, writing for instance that “the official report by the Washington bureau was also grossly unreliable.”¹⁷¹ Schmid also condemned the “knowingly false official information published by the American Department of Agriculture.”¹⁷² In addition to financial investors’ manipulation of the market, a very different sort of speculation was now emerging: American cotton farmers were increasingly organizing into trusts that sought to influence cotton prices in their favor. Thus, speculators “were able, using new, quintessentially American means, to gradually drive up prices by a significant degree despite the exceptional harvest.”¹⁷³

The International Cotton Federation

The British cotton industry, which was the worst affected by speculation, led the way in the European response to American market manipulation.¹⁷⁴ Macara initiated an international congress of the European cotton industry that took place in Zurich in March 1904.¹⁷⁵ This congress laid the foundations for a new, transnational body: the International Federation of Master Cotton Spinners and Manufacturers’ Associations (International Cotton Federation), which Macara presided over for many years from Manchester. Augsburg was represented on the new international federation’s board by Groß, who served as honorary treasurer.

The federation aimed primarily to oppose American speculation via international laws, make the transatlantic cotton trade less unpredictable, and open up alternative cotton-growing regions around the world. In the following years, it pushed for reforms not just to the trade in cotton but also to agricultural production in the USA itself, with the goal of increasing harvest yields. The federation also produced reliable statistics about worldwide cotton reserves, demand, and consumption. The overarching goal of its members was to bring about greater standardization of the cotton trade.¹⁷⁶

The reformers therefore turned their attention to many different aspects of the cotton trade, some of which seem relatively peripheral. They sought to standardize the pressing, baling, storage, weight, units of measurement, quality standards, moisture levels, transport, bills of lading, insurance, stock exchange rules, contractual forms, and so on, to give commodity buyers in Europe greater legal certainty in their international business dealings. The International Cotton Federation’s sphere of influence quickly expanded to America, Asia, and Africa.

The federation’s central forum was its annual congress, which took place in various European cities in the years leading up to the First World War, and was attended by industrialists from Augsburg.¹⁷⁷ At the congress held in Manchester and Liverpool in 1905, SWA Director Groß (fig. 4) pushed for the introduction of the metric system in international cotton trading, which until now had been dominated by British imperial units.¹⁷⁸ Groß himself presided over the third international congress, hosted in Bremen in 1906. The main topics of discussion were international cotton exchanges, regulation of the global cotton supply, and efforts to establish cotton growing in European colonies. In his opening address, Groß emphatically supported not just the principle of competition but also efforts to “remove the ill feeling sometimes apparent in the competition between nations,” since “the first consideration for the welfare of all industry is the peace of the world, and the lasting good-will of the nations.”¹⁷⁹

Just as the VSBI and Bremen Cotton Exchange had done at the national level in Germany, the International Cotton Federation now represented a European-centric association whose members put aside their competing interests for the sake of greater collective trading power. Groß expressed the belief that a forum like the Bremen congress could secure harmony between individual nations’ conflicting interests by promoting “mutual respect shown everywhere and at all times.”¹⁸⁰ He formulated the utopian vision of a transnational community coming together to “further the welfare and prosperity of an industry equally important for all countries”¹⁸¹ Groß clearly shared the same view of the federation’s historic mission as Macara, whose “idea of internationalism” consisted in trying “to see things in their worldwide relations.”¹⁸² Macara saw the founding of the federation not simply as “the birth of a new international idea in industry,” but, far more momentously, as “the birth of a League of Nations.”¹⁸³ The idea of a transnational league went far beyond the purely economic dimension of the International Cotton Federation. The Bremen congress of 1906 also dipped its toes in political waters by seeking an audience with Kaiser Wilhelm II, who received a deputation from the federation on his yacht.¹⁸⁴

The 1907 Atlanta Conference

Another Augsburg cotton industrialist who rose to prominence in the International Cotton Federation was Waibel, who succeeded Groß as SWA’s commercial director following the latter’s death in early March 1907. Waibel served on the federation’s Cotton Contract Commission, whose duty was to “collect information on the baling, handling, marketing, and shipping [fig. 5] of American cotton, and consult with the authorities of the various Cotton Exchanges and the associations of spinners and American cotton planters, with a view to drafting new contracts.”¹⁸⁵ Just a year later, the commission was able to report its first success, when the Liverpool exchange accepted its proposals and introduced a new contract that reduced the price of international trade.¹⁸⁶

Leading representatives of the American cotton industry attended one of the annual congresses for the first time in Vienna in 1907. They invited members of the European federation to come to a conference in Atlanta, Georgia, in order to foster closer future cooperation and break down transatlantic divides.¹⁸⁷ The German delegation that set off in fall 1907 had twenty members, of whom no fewer than five were from Augsburg.¹⁸⁸ Among them was Waibel, the freshly appointed director of SWA, whose supervisory board had authorized him to attend the Atlanta conference because “this fact-finding mission will undoubtedly afford him valuable experiences that will also benefit our company.”¹⁸⁹ The SWA director’s long journey—nearly eight thousand kilometers—mainly took him through the Cotton Belt (fig. 6) in the southern states. The visit gave Augsburg’s industrialists unprecedented access to those involved in cotton growing on the other side of the Atlantic. For the first time, they were able to witness and learn about the Americans’ production and marketing at first hand. They had ample opportunity to visit cotton farms and cotton exchanges and speak with representatives of the cotton growing industry and the newly established American associations, as well as politicians and officials, including government ministers, state governors, congressmen, and presidents of chambers of commerce.¹⁹⁰ The first main consequence of this expanded access to the American market was improved communication and closer (or in many cases entirely new) networks connecting the stakeholders along the cotton commodity chain.

The highlight of the European delegation’s trip was the congress in Atlanta from October 7 to 9, 1907. With its vast array of attendees—the European delegation alone had over a hundred members—it seemed as if the congress had brought together the entire global cotton industry under a single roof in a way never before witnessed: “In terms of the number of attendees, the scale, and the variety of invested capital, there has certainly never been an assembly like this before, nor will there likely be one to rival it any time soon.”¹⁹¹ As with the industry advocacy groups in the German and European context, the Atlanta congress sought to put aside the competing interests of different segments (for structural reasons, cotton farmers, exporters, exchanges, and spinners were diametrically opposed on many issues) and create a new organization capable of collective action.

At the congress, the American farmers attempted to circumvent the intermediaries and commodity exchanges by establishing direct links with the European cotton spinners.¹⁹² In his report on the congress, Waibel, as an advocate of the industry, rejected the farmers’ plan: “It is a utopian fantasy to imagine that trade could be entirely eliminated and that planters could sell directly to spinners.”¹⁹³ The SWA director laconically remarked that speculation would “always exist in one form or another.”¹⁹⁴ Waibel was especially opposed to jettisoning the futures market, which, as a “fine measurer of value” and “cheap reinsurance organization,”¹⁹⁵ allowed businesses to secure their transactions. While not uncritical of the excesses of futures trading, the Augsburg industrialist wrote with sober pragmatism that

What may be prohibited in one country by special legislation will simply continue unperturbed elsewhere. Nothing whatsoever can be achieved by laws confined to one country, and the prospect that all countries in the cotton trade would uniformly legislate against the futures exchanges will not be deemed likely or feasible even by their fiercest opponent.¹⁹⁶

Waibel was more critical of the independently organizing American farmers themselves, who were calling for guaranteed minimum prices for their cotton. The Augsburg director believed that, if the planters’ intention was to “systematically hold back their cotton and force prices up,” such demands would amount to speculation “on the grandest scale” and of “the most dangerous sort.”¹⁹⁷ The American farmers’ “price-fixing cartel” would, in Waibel’s view, be as damaging as “artificial manipulations of the cotton market.”¹⁹⁸ The 1907 chamber of commerce report was even more critical of the Atlanta farmers’ demands, claiming they—backed by “paid agitators” and “powerful organizations”—were only interested in “getting the highest possible prices for cotton.”¹⁹⁹ It was feared there could be a dire scarcity of cotton if the farmers made good on their threat to drive up prices by reducing the acreage under cultivation. The farmers could instead, the report claimed, achieve far higher yields by expanding and intensifying cotton growing. However, the “great labor shortage in the southern states” and (in the racist view of the report writer) “idleness of the negro population”²⁰⁰ would prevent a rapid increase in cotton production.

The chamber of commerce’s skeptical attitude overlooks the European spinners’ many successes at the Atlanta conference, where they were able to successfully negotiate a “better selection of seed,” “more careful picking and ginning,” and “improved baling, pressing, storage, and transportation of cotton.”²⁰¹ There were encouraging signs that transatlantic communication could now develop into transatlantic cooperation, words into action, promising progress for intercontinental trade.²⁰² However, what the Atlanta congress failed to do was establish a completely new international organization that brought together the American farmers and European cotton industrialists.²⁰³

The “Baumwollkulturkampf”: Cultivating Cotton in the Colonies

Another prominent topic at the International Cotton Federation’s annual conferences concerned efforts to develop cotton growing in colonial territories so as to provide an alternative source and break the American monopoly. New organizations sprung up to support these efforts. The first was the British Cotton Association, founded in 1902 to promote cotton farming in the British colonies. The Augsburg industrialist Haßler had already pushed for the cultivation of cotton in the German colonies during his tenure as president of VSBI in the 1880s, and his Stadtbach mill provided support to the Deutsch-Ostafrikanische Plantagen-Gesellschaft, a company founded in 1886 to establish plantations in Germany’s East African colonies.²⁰⁴ The “cotton question,”²⁰⁵ which escalated into a “cotton emergency”²⁰⁶ or “cotton-growing struggle”²⁰⁷ (Baumwollkulturkampf), was also one of the main concerns of the Colonial Economic Committee, established in 1896 as a spin-off of the German Colonial Society founded in 1887.²⁰⁸ Founding member Karl Supf, a native of Nuremberg, spent years advocating cotton production in the German colonies.²⁰⁹

In 1900, SWA contributed one thousand marks for an “expedition to establish local cotton cultivation in the German colony in Togo.”²¹⁰ It was thus directly involved in the German Empire’s expansion into colonial cotton production. In 1904, the supervisory board discussed providing funding to a plantation company in Togo (Pflanzungsgesellschaft Kpeme).²¹¹ In March 1907, a donation of five thousand marks was made to the Colonial Economic Committee to promote cotton production in the German colonies.²¹² The VSBI raised 150,000 marks for the committee between 1907 and 1912.²¹³ Despite the enthusiasm of the colonial authorities and some promising early successes, Germany’s African cotton yield (produced by local populations living and working in very poor conditions) fell short of the high expectations.²¹⁴ In 1912, the German colonies produced a total of eleven thousand bales of cotton, enough to cover at best a tenth of Augsburg’s annual demand at the time.²¹⁵ Looking beyond the German colonies, SWA also took an interest in cotton growing in Mesopotamia, but this did not lead to any appreciable results.²¹⁶ When the committee of the International Cotton Federation met in Berlin in October 1911, the expansion of cotton cultivation in countries outside the United States was likewise high on the agenda.²¹⁷

An Increasingly Virtual Market: The Situation in Augsburg in the Period up to 1914

Despite all efforts to find alternatives, the Augsburg mills remained primarily dependent on American cotton up until 1914, during which time cotton prices continued to fluctuate sharply. Between 1907 and 1913, the price for a kilogram of Middling Americans (loco Bremen) averaged between 110 and 155 pfennigs, reaching extremes of 89.5 pfennigs in December 1908 and 160.5 pfennigs in June 1911. The strongest movement came between September and December 1911, when the price plunged by 40 percent. Previously, in 1908, it had fallen (albeit more slowly) by 30 percent. During this time, there was a renewed surge of speculation.²¹⁸ Although weather conditions caused considerable variation in American harvest yields—ten million bales in 1909, over 15.5 million in 1911, over sixteen million in 1914—commodity speculation remained very tempting to financial investors, who sought to capitalize on uncertain crop forecasts, whether by selling short or buying long. The Chamber of Commerce for Swabia and Neuburg observed in 1906 that the “global cotton business” appeared to be “temporarily healthy,”²¹⁹ but this state of health proved to be very temporary indeed, even though the financial and banking crisis that broke out in the USA in 1907 briefly reined in cotton speculation. Prices consequently rose that year, gradually leading to a shortage of money that meant “bullish speculators were unable to take full advantage,”²²⁰ despite a relatively low cotton harvest, and so the “outrageous prices”²²¹ that the cotton planters hoped for failed to materialize. In 1908, the VSBI attempted to counter the economic downturn caused by the American crisis by cutting business activity by 14 percent, but the other German cotton associations did not back the measure.²²²

In the years leading up to the First World War, the Augsburg spinners also realized that the rapid expansion of worldwide spinning capacity had undermined the automatic connection that used to exist between a plentiful harvest and a fall in cotton prices. In 1909, American speculation returned with a vengeance, and, in combination with reports of a poor harvest, drove commodity prices to “extraordinary heights.”²²³ Two years later, in 1911, cotton prices collapsed in the last quarter of the year. This took a heavy toll on Augsburg’s businesses, which had to record significant losses in the year’s balance sheets: SWA—whose annual cotton account between 1900 and 1914 ranged from 2.8 to 7.2 million marks²²⁴—reported a loss of nine hundred thousand marks. The following year, 1912, speculators once again managed to manipulate commodity prices,²²⁵ and in 1913 the price of Middling Americans (loco Bremen) lurched between 121 and 147 pfennigs per kilogram. Despite the volatile prices, SWA, which had opened a fourth factory in 1909/10, continued increasing its production capacity up until 1914, and its demand for raw cotton rose accordingly (see chart 3).

Augsburg’s textile industrialists adopted various strategies to counteract the structural uncertainty of cotton prices, which was exacerbated by speculation and unpredictable economic fluctuations. Initially, they strictly followed a “hand to mouth”²²⁶ buying policy where they only bought as much cotton as they needed for existing yarn or cloth orders. Consequently, the required cotton was generally purchased less far in advance, something made possible by modern communication technology. The cotton agents in Augsburg made bids by telephone and telegram, based on the weekly price updates from New York.²²⁷ These agents could represent up to a dozen cotton importers, though sometimes they acted solely on behalf of a single broker in Bremen, who in turn acted as a sales representative for an American cotton exporter.

Through such intermediaries, SWA did business with over twenty cotton companies between 1900 and 1914. Although it made some import deals directly with US trading companies, including the famous Alexander Sprunt & Son in Wilmington (North Carolina),²²⁸ most of its transactions went through Bremen-based firms, agencies, or brokers. SWA’s business partners in Bremen included German importers such as Heineken & Vogelsang, Gebrüder Plate, and H. Bischoff & Co., as well as British and American importers such as Pferdmenges, Preyer & Co., Inman Akers & Inman, and McFadden Bros. & Co.²²⁹ The latter company alone, which had owned a subsidiary in Bremen (McFadden Zerega and Bros.) since 1892, imported over two hundred thousand bales a year to Europe through the Hanseatic port.²³⁰ SWA still also made occasional purchases via Liverpool.²³¹ Just how smoothly the Augsburg cotton imports generally went is made clear by the rare cases where serious problems occurred along the long import chain. For instance, in summer 1910, SWA fell victim to fraud by the cotton company Steele, Miller & Co., and had to swallow a loss of 162,000 marks²³² after the American firm went bankrupt.

In the 1910s, the real economy became increasingly virtual. Various trading companies now moved to selling cotton not just for the short term, but for several years ahead. SWA, which had been purchasing certain cotton grades for immediate delivery for decades, was initially resistant to this new form of speculative commodity buying. The growing risks of an increasingly fast-paced market, however, forced even this company into futures trading in the end. Lindenmeyer, who was appointed commercial director on January 1, 1911, and had learned the art of hedging cotton in Liverpool,²³³ paved the way for the company to protect its cotton transaction against significant price fluctuations using futures.²³⁴ The supervisory board was very reluctant “to depart from the principle followed hitherto” of refraining from active market speculation, but concluded that “the exceptional present circumstances justify such a step.”²³⁵ Consequently, SWA was cautiously active on the futures market until World War I, profiting on occasion from favorable price developments.²³⁶ Right up until 1914, Lindenmeyer felt obliged to stress that futures “were by no means speculative in character,”²³⁷ but rather that “it was no longer possible to protect our inventories against loss” without the “safety valve of hedging.”²³⁸ In a departure from his previous conservatism, the supervisory board chair, Schmid, supported Lindenmeyer’s new course, which “is now the modern way of thinking.”²³⁹ The Bremen Cotton Exchange also moved with the times and began futures trading in 1914, though this was then suspended again during the First World War.²⁴⁰

The First World War and the Return of Politics

Political events, especially wars, had often negatively impacted the development and expansion of the global cotton market over the course of the long nineteenth century. The Balkan Wars of 1912–1913 now brought the threat of war ever closer to Germany. At SWA too, “fears of becoming entangled in further wars” were “straining tempers.”²⁴¹ The economic paralysis triggered by the threat of war prompted the south German and Alsatian cotton mills once again to agree upon a mutual cutback of business in spring 1914, this time of 17 percent. However, the outbreak of the First World War, which soon saw the British naval blockade preventing the import of American cotton to Germany, meant that normal economic activity was largely suspended, despite the temporary and modest wartime boom from commissions to make materials for uniforms and zeppelins. Augsburg cotton businesses’ attempts to circumvent the blockade using neutral ports such as Genoa yielded only limited results, as did the representative they dispatched to the USA to look after their interests. The war condemned the Augsburg companies to unprecedented passivity.

Since the 1840s, globalization had seen the world economy make impressive advances, but now the First World War forcefully reasserted the primacy of politics in the global context.²⁴² The German military administration confiscated the cotton reserves of the mills in Augsburg in the national interest. A “struggle between nations […] more violent and bloody than any before seen in history”²⁴³ not only had a devastating material impact on the warring nations, but also destroyed the vital network of a highly globalized economy. The war rapidly undid the preceding seventy years of global economic integration in the German cotton industry; a process of “deglobalization” tore apart international economic activities and advocacy groups at the seams.²⁴⁴ In 1916, the SWA spinning mill only produced 7.5 percent of its peacetime output. Switching to Indian and Egyptian suppliers was not enough to make up for the loss of American cotton. The global structures and economic relations that had grown up over the course of decades atrophied, and Augsburg’s cotton industry was reduced to national rather than international stature.²⁴⁵ It was not until the Wirtschaftswunder of the 1950s that the local textile industry returned to prewar levels of productivity.

Augsburg at the Intersection between Local and Global

The history of cotton imports to Augsburg between 1840 and 1914 shows clearly that the city could not have become one of Germany’s leading textile centers without the extensive imports from America. Although there were times when the local spinning mills purchased up to 50 percent of their cotton from India, there was far greater commercial focus on US suppliers and markets. During the period under consideration here, Augsburg-based companies did not merely passively profit off a globally expanding and consolidating cotton market, but actively helped to shape it, with the aim of securing cotton on the most favorable terms.

It would be an exaggeration to present Augsburg’s entrepreneurs as major drivers of globalization or as multinational business magnates.²⁴⁶ When it came to organizing production and exports of its products, the Swabian textile industry acted at a local rather than a global level; but when it came to buying cotton, it was very much operating on international terrain. From the 1830s onward, it branched out further and further into this terrain and navigated it with growing assurance, buying cotton in the Netherlands, France, Britain, or directly from the USA. Through its involvement in trade associations like the Bremen Cotton Exchange, it helped to expand this terrain, establish new connections, and exert greater control over commodity flows, thus reshaping the geography of the European cotton trade.

The great, often imponderable complexity of the global cotton market presented a unique challenge for Augsburg’s textile entrepreneurs. The factory directors’ main priority was to make cotton—which as a natural commodity was exposed to many uncertainties—less volatile, more predictable, and easier to manage in their own interests. One way to improve their grasp of the market and its peculiarities was to professionalize its personnel, ideally recruiting people with experience of the key European cotton markets of Le Havre and Liverpool. Greater professionalism at senior management level helped businesses expand their networks of commercial contacts, an informal yet crucial communicative resource that previous studies have overlooked.²⁴⁷

Another way to reduce the uncertainties of the global cotton market was to band together in trade associations that advocated for the industry’s interests. Initially, Augsburg’s industrialists organized at the regional level in south Germany (VSBI) and at national level (CVDI, imperial inquest committee). Later, they branched out to the international port of Bremen (Bremen Cotton Exchange), before finally bridging the gap between Europe and the USA (International Cotton Federation). Step by step, they progressed from regional advocacy groups representing their own local interests to a federation that included the country where the cotton was actually grown. This transatlantic expansion of the German spinners’ interests was made manifest by SWA Director Waibel’s 1907 trip to America. German industrialists used member organizations and trade associations as a way to expand their agency.

The transnational scope of the International Cotton Federation was without precedent at the time. During the period of the German Empire, Augsburg entrepreneurs became increasingly involved in trade organizations, which allowed them in turn to exercise governance over distances not previously possible.²⁴⁸ This greater agency came at the cost of setting aside (at least in theory, though often not in practice) structurally opposing interests between groups such as spinners and cotton traders so as to increase their collective influence.

Augsburg industrialists also supported greater standardization of the global cotton trade as a strategy to increase calculability.²⁴⁹ The more globally integrated the market became, the greater the need for standardized, regulated trading conditions in terms of product quality, legal matters, units of measure, currencies, insurance, bills of lading, baling standards, and so on. There were also efforts to standardize the compilation and publication of market information such as statistical data, while reliable legal standards increased confidence by helping to resolve any disputes that arose in the course of international trade or, even better, prevent them from occurring in the first place. However, the choice of standards for things like units of measure and currency was often based on market actors’ interests rather than on merit. One example of this was the dispute over whether to introduce a metric system for yarn numbering, which was eventually settled in favor of the market-dominant British. Britain’s preeminent role in the global economy meant the German spinning mills faced all sorts of structural disadvantages, some of which continued right up until the First World War.

The private, locally rooted commercial actors acted primarily in their own business interests, unlike political bodies, such as governments, that represented the interests of entire regions. The state did not normally stipulate or determine commercial activities, which were motivated by profit. The true actors in the field of foreign trade were not whole economies but individual companies;²⁵⁰ these did not operate as atomistic units, however, but formed associations to advance their mutual interests.

In terms of agency, the present study of entrepreneurs in Augsburg’s cotton industry reveals a diverse range of activities and forms of participation in the international market. These frequently demanded great flexibility, and actors were often put on the defensive or condemned to passivity. The concept of action familiar from classical political history, which is premised on the idea of sovereign decision-makers, is inadequate to describe the many varieties of entrepreneurial activity at the intersection between structures and events, fixed conditions and variable means, macro- and microeconomics. The fields of action that emerged between these poles are best understood in terms not of one-dimensional, monocausal subject–object relations, but rather of systemic, multilateral, and polycentric structures.

A closer analysis of the Augsburg cotton industrialists’ business activities shows that they were primarily communicative in nature. Large quantities of information were exchanged through extensive communication networks: constantly updated bids, inquiries, weather reports, statistical news, commodity orders, and so forth. Technological advances changed not just the modes of communication that were used (for instance, new inventions like the telegraph and telephone), but also the intensity and volume of communication, and vastly accelerated action and reaction times on the market. In combination with new modes of transportation, these new media compressed both time and space, and forced the now-synchronized entrepreneurs on both sides of the Atlantic to act ever more quickly while simultaneously processing ever more information. However, more information, even statistical data that bore the seal of scientific rigor, did not automatically provide a better basis for decision-making, as there was also an increased risk of deliberate misinformation being spread.

Another aspect of the Augsburg textile industrialists’ business practices was the emphasis on instrumental rationality. Their choice of means was motivated primarily by the end of maximizing profits (the characteristic motive of industrial capitalism). However, residues of value-rational behavior still lingered, such as SWA’s longstanding reservations about investing in futures despite it making perfect sense from an economic point of view. These reservations suggest a moral aversion to a market instrument that was regarded as highly speculative and increasingly detached from the real economy. Furthermore, all capitalist number-crunching notwithstanding, Augsburg’s industrialists continued to attach great value to trust in their business partners.²⁵¹

The example of futures trading, which ushered in the phenomenon of deliberate market speculation, makes clear that the history of Augsburg cotton imports cannot be adequately described solely in the terms of a classical economic history, but must also take account of historical subjects’ knowledge and perceptions. Having better information often entailed an economic advantage. However, since this information never provided an objective guide to action but always had to be interpreted, it was constantly being transformed into subjectively colored perceptions of market possibilities. The faster that commerce became after the invention of the telegraph and telephone, the more quickly purchasing decisions had to be made, and the riskier they became for those who were unwilling to protect their transactions using futures. Companies that did not seize the initiative at the right time could easily become passive victims of merciless market mechanisms. The need to become active on futures markets, which extended the credit-driven economy ever further into the future, raises a fundamental theme of modern economics: namely, that global economic expansion inevitably involves increased risk-taking. Companies hungry for profit had to accept a whole host of contingencies, imponderables, and uncertainties, even as they sought to minimize these risks.²⁵² This high-risk way of doing business brought with it a constant pressure to modernize as well.

It was the allure of profits that finally coaxed Augsburg’s entrepreneurs into riskier international trade so as to obtain the cotton that they needed. Although this meant that south German companies were now operating in a global framework, their activities were still rooted in Augsburg. The Bavarian city remained the local point of departure for economic activities with a global geographic reach, the vantage point from which the meaning and purpose of these activities were framed, the hub around which economic space, with its regional, national, and global spheres of action, was concentrically arranged. Global value creation orbited around local profitmaking. The present study of global trade in a particular location thus reveals both the global dimensions of the local and the local conditions of the global.²⁵³

The global history perspective adopted here has also demonstrated the fruitfulness of an approach that situates global economic phenomena within specific local contexts, thereby contributing to a topography of a globe-spanning economy that is always also a social topography of economic relations. It would be a tempting challenge to use Augsburg as a test case for whether the concept of “glocalization”—as popularized by Roland Robertson— can be applied historically.²⁵⁴ The choice to examine globalization from Augsburg’s perspective has in any case shown that the global economic integration of the long nineteenth century was not an anonymous process of consolidation, but involved a host of local processes of adaptation that gave concrete expression to globalization, which was only ever manifested in a situated, context-bound form. Situating global phenomena within a specific local context reveals the fine-grained differences in how globalization progressed in different places, with distinctive rhythms, dynamics, phases, scopes, and histories. Studying a localized instance of globalization could help to shed light on the “multiple modernities” that existed even within Western society.²⁵⁵

However, the focus on the phenomena of globalization investigated here should not be taken to imply that the economic activities of the textile industry in Augsburg can be reduced to a simple interplay of local and global factors, or that these companies’ transnational operations were unaffected by the politics of nation-states and individual German states. After all, it was the Bavarian and German governments that determined the framework within which these companies operated, by establishing chambers of commerce, customs tariffs, trade and labor laws, and so on.²⁵⁶ Leading textile industrialists in Augsburg were in turn often closely involved in municipal, regional, and national politics.²⁵⁷ Just as local, national, and global perspectives should be seen as complementing rather than competing with one another, it would be misguided to treat the economic and political spheres as completely separate. Ultimately, what allowed Augsburg cotton companies to flourish on the fiercely competitive markets right up until the First World War was a dialectical interplay between local, regional, national, and global factors.