There was a time when cotton was king in Memphis. The best place to learn about this is at the Memphis Cotton Exchange, which has been converted into a wonderful cotton museum. Located in the heart of downtown Memphis, the Memphis Cotton Exchange is where cotton farmers would bring their annual harvest to sell to traders who, in turn, sold it to textile manufacturers across the world. It was, for many years, the heart of a regional economy; a crossroads for many cultures; and a place where fortunes were made and lost.
To understand the exchange, you need to know a bit about cotton. In the early 1800s, as farmers began moving into West Tennessee, they began discovering that cotton grew wonderfully there. But to make money from cotton, they had to sell it to people who wanted large amounts of it, which meant people who owned textile plants which made cloth. It made sense for the people who owned these textile plants to buy the cotton at a central location rather than to go from farm to farm. Ideally, such a "cotton exchange" should be close to rivers, railroads and roads -- so buyers could quickly move the cotton where they needed it to go.
The Memphis Chamber of Commerce organized a cotton exchange in 1874; the building in which the cotton museum is now housed first began serving as the Memphis Cotton Exchange in 1925. In its heyday, the Memphis Cotton Exchange was the heart of an area dominated by the buying and selling of cotton.
So imagine that you were a cotton farmer in Tipton County in the 1920s. In a typical year, you would harvest your cotton in the fall and take the raw cotton to a local cotton gin. You'd load the raw cotton into the gin, which would clean it, remove its seeds and pack it tightly into 500-pound bales.
The bales of cotton would then be taken to Memphis (often by mule and wagon). Before the bales were loaded into a cotton warehouse, a sample would be cut from the bale and delivered to one of the so-called "sample rooms" rooms in the buildings along Front Street, near the Memphis Cotton Exchange. There, experienced cotton "classers" would inspect the cotton and classify it into one of several cotton "grades," depending on the cotton's quality. (There are many grades of cotton, with names such as "strict low middling" and "good ordinary.") This inspection process was as much an art form as it was a science, and in the old days it had to be done under natural light.
The classer would then send word to a cotton trader, who would then look for a buyer -- either on the floor of the Memphis Cotton Exchange or maybe on the street in front of the exchange, where many buyers could be found. The buyer might, in some instances, be represented by another person on the exchange. Or the buyer might be located in a remote location, reachable by phone or by Western Union telegram. If the seller was lucky, he might find more than one person to "bid" on a quantity of cotton at a time, driving the price higher.
What we've described is a basic transaction between buyer and seller. In fact, the business of buying and selling cotton gets more complicated. For instance: when you're in the Cotton Museum, you will notice the big chalkboard on the upper wall. The numbers on this board didn't reflect cash transactions that were made at the Memphis Cotton Exchange; they signified prices paid on the "futures market" -- which is the buying and selling of cotton not yet harvested.You see, the futures market was, and is, a big part of the world of finance; the price of cotton futures has a lot to do with the price of harvested cotton. So it was important for cotton traders to keep up with the futures market. What better way to see it than on this big board?
Now you know, in very broad terms, what took place at the Memphis Cotton Exchange. Here are some things to keep in mind:
- Once sold, cotton usually left Memphis by steamboat or (in later years) by train.
- The exchange was a "members only" club. In general, only buyers and sellers and people who worked for them were allowed on the exchange floor. The cotton farmers generally stayed outside. So you can see how there had to be a real sense of trust between the farmer and their representative on the exchange floor.
- The exchange had a set of rules governing the sale of cotton, its class, its weight, the way in which it was to change hands, etc. However, most sales were originally agreed to by handshake.
- Sometimes there was a lot happening on the exchange. Sometimes there wasn't much for buyers and sellers to do but wait for a farmer to bring in another crop. While they waited, the most common activities on the exchange were dominoes and checkers.
You can learn much more about all this at the Cotton Museum at the Memphis Cotton Exchange. At the museum you can see diplays on cotton, the cotton gin, cotton traders, and ways cotton is used. At computer terminals located on the exchange floor, you can hear recorded first-person accounts of what it was like to work there years ago. In the old phone booths, you can see films and displays on the history of cotton, of the exchange, and the culture it created. This includes blues music, which came out of the world of cotton.
The most interesting film shows actual footage of life on a 1930s cotton plantation in northern Mississippi. This rare film shows mules being unloaded, people picking cotton, and farmers hauling wagons full of hay to the cotton gin using mules. It also includes scenes of life at that time, including a baptism and a large picnic.
Teachers, if you can't bring your class to the museum, we recommend strongly that you order a film from the museum called "The Story of Cotton," which includes the story of the exchange and the footage of the plantation we mentioned earlier. If you would like to buy a copy of the DVD for $15, call the museum at 901-531-7826.