Some Manchester dealers imported themselves, and some spinners bought direct from Liverpool importers, but the rule was the arrangement first described.
Early in the 19th century it became customary for Manchester dealers and Liverpool importers to carry on business with one another through representatives known as " buying " and " selling " brokers.
At the same time of " futures " were becoming an increasing necessity to Origin Liverpool importers, because through " futures " alone could they cotton hedge on their purchases of cotton, or buy when the Associa- market seemed favourable, and they were not prepared tion .
Now from the clearing house importers were rigorously excluded, and on invoking the aid of " futures," therefore, they were penalized to the extent of double broker's commission, one commission being charged on the sale of the " futures " and one on their purchase back.
The importers, therefore, found it necessary to establish a club of their own, the Liverpool Cotton Exchange, which they as rigorously guarded against brokers.