The Sun.
London, England, 1839-06-27 00:00:00

THE AMERICAN COTTON SPECU-

LATION.

( From the Manchester Guardian of Wednesday.)

The New York packet ship, George Washington,
which arrived at Liverpool on Monday, has brought
over to this country a curious document, in the shape
of a circular, alleged to have been issued by, or under
the sanction of, the Bank of the United States, to the
different parties, factors, planters, and others, interested
in maintaining the prices of cotton. This circular, or
alleged circular, has attracted so much attention, and
given rise to so many remarks, both in this town and
Liverpool, that we shall, no doubt, stand excused by
our readers for transferring it to our columns, and ap-
pending a few remarks. It is to the following effect :
New York, June 16th, 1839.
You have, doubtless, received the very unfavourable
advices by the. Great Western, in relation to the Cot-
ton Market. These advices, it is apprehended, do not
disclose, even to the full extent, the dangerous situa-
tion in which our great staple is placed.
The diminished demand for yarns and cotton goods
on the Continent, the short harvest of the last year, the
shipment of bullion from Great Britain, and consequent
rise in the rate of interest by the Bank of England,
must all inevitably tend to a greater and more accele-
rated decline in prices, if some steps are not promptly
adopted to prevent the remaining stock of cotton now
in this country from being offered for immediate sale in
the European markets.
If the consumption of raw cotton in England had
only diminished some 10 or 15 per cent., still, in conse-
quence of the now clearly ascertained deficiency in the
last year's crop, which has fallen nearly as low as the
lowest estimate, past prices would not only have been
safe to the shippers, but profitable ; and hence they are
not obnoxious to the charge of unwarrantable specula-
tion, which so often deprives the spirit of rash commer-
cial adventure of all just claim to sympathy.
This extraordinary falling-off in the consumption of
the raw material is, perhaps, not a little aided by a de-
termination on the part of the English spinner to have
the residue of the crop at his own price, under a belief
that, as the great and tenacious holder of the last year is
out of the market, there exists no serious difficulty in
his way, by working short hours for a few weeks, to ac-
complish this desirable end. It becomes necessary,
therefore, to supply the absence of -that"great protector
by some co-operation among individual interests.
Now, it is quite obvious, that but one of two modes
would be likely to counteract the result that must
otbenc;:e inevitably flow from the causes just indicated.
The first would be to organize, through the aid of the
Bank of the United States, and the banks in the
principal emporiums of the different states, a combina-
tion sufficiently powerful to advance a sum on every
bag of cotton on this side of the water, which would
ensure its being kept in this country for three months ;
the other scheme would be to concentrate in one house,
in Liverpool, the whole or the greater part of the cotton
now to go forward, by an arrangement for unfailing, ade-
quate, and collateral aids, sufficiently powerful to enable
the house in question to hold over until a greater part
of the present stock of cotton in England is worked off
at advanced price ; a result which the successful execu-
tion of this plan would inevitably secure.
The first scheme, however, is liable (notwithstanding
its direct and immediate power to produce the desired
result) to the conclusive objection of arresting all our
foreign exchange operations, which might hazard the
ability of our Banks, even in the Atlantic States, to
continue specie payments ; whilst the last project would
be entirely free from this objection, as it would at once
augment the current of exchanges, and enable us to
weather the crisis, which the first plan would be but too
apt to produce.
These views are the result of a conference which,
yesterday, was held with one of the most influential and
intelligent merchants of Philadelphia, in conjunction
with commercial gentlemen of equally high standing
from other portions of the union.
It is, therefore, announced to you, on the best autho-
rity, that an arrangement has been made, by which an
advance of three-fourths (on what may be estimated as
the present market value of cotton, say 14 cents) will
be made on every bale in this country, at our principal
shipping ports, to all holders, if they desire to avail
themselves of this advantage. The consignments are
to go forward to Humphreys and Biddle, who, sustained
by adequate means on both sides of the water, will be
able to bold on until prices vigorously rally.
If the usual casualties of the season render a short,
or anything under an average, crop probable, this
plan must result in great profit to shippers, and bene-
fit to our country. If, on the other hand, the autumn
should disclose the promises of an abundant harvest,
the large stock of cotton which Messrs. Humphreys
and Biddle, in case the shipments are made to them,
would hold, would probably induce the great and power-
, ful interest which sustains them, to enter the market
in the United States early in the autumn, by ad-
vancing on the first quarter of the new crop, in
order to retain it on this side of the water for a rea-
sonable period, so as to make the final result of the
short crop of 1838 entirely safe to all American shippers
and holders.

A. copy of this circular is enclosed to the principal
cotton factors, and shippers, and presidents of the banks
in the louthern --ettlesT-to tvnom,wan 'tat puper---xtere-

rence, it is suggested, in case the advance on the ship-
ment to Messrs. Humphreys and Biddle should not
cover the full convenience of the shippers, that the
institutions over which they preside do afford, on good
personal security, the residue of the accommodation
which may be required.
Your hearty co-operation in this plan is solicited for
the purpose of saving the interests of our great staple,
which must end in establishing, not its speculative value,
but its fair price according to the just relations which
supply and consumption should bear to each other. An
agent, empowed more fully to disclose these views, will
be in your city in a few days, on his way south, and will
be prepared to carry them fully into effect.
P.S.—From the most authentic sources of informa-
tion, you may take the following as the probable and
entire stock of cotton in the United States, of the crop
of 1838, on the 15th day of June next ensuing, either
actually present in depot. or to come forward from the
interior markets :
New Orleans ...... 100,000 bales
Mobile
Florida 12,000
South Atlantic States 30,000
New York 75,500
At unenumerated points 12,000

275,000 bales
Of this amount the manufacturing establishments of
the United States will require at least 75,000 bales be-
fore the new crop comes forward, l'Eaving about 200,000
bags for foreign export. It ought to be remarked, that
the bales this year are about 15 per cent. short weight,
from the now general use of smaller compressing boxes,
with a view of rendering the cotton packages more
portable.
N.B. For obvious reasons, it is not desired that this
private circular should appear in the public prints ;
make otherwise what use you please of it.
The first question that will present itself to the mind
of every rational man who reads the preceding address
will be—can this be a circular issued by or under the
sanction of the United States' Bank ? It will be seen
that the letter itself nowhere speaks of the Bank as
being concerned in the accommodation proposed to be
offered to the cotton-holders, but we find the Liverpool
Albion and the Liverpool Standard both speak or it as
having been unquestionably issued by that establish-
ment ; and the Liverpool Times says—" We were at
first disposed to consider it a hoax, which was also the
impression of some persons more competent to form an
opinion than ourselves ; but from the quarters from
which it was received, this can scarcely be the case."
We find also in the Liverpool Standard a copy of a
letter purporting to be addressed by a house at New
York to a mercantile house at Liverpool, from which
the following is an extract ;
" New York, June 7, 1939.

" The accounts per Great Western were of the
most disastrous kind for the cotton interest, and have
had their effect here • but there are causes operating in
this country that will be developed before the Great
Western's return, which will reinstate confidence, and
she will carry out as good accounts of the state of things
in this country as before. The truth is, the United States'
Bank has again come forward to relieve the dealers
and holders of cotton, both in this country and Eng-
land, and will control what balance there is in this
country, at all events, and operate on your side to an
extent to affect your market, and give it stability. She
has given a pledge to hold from 200 to 400,000 bales
of Cotton till the 15th of October next, if necessary, to
effect such an object. This, with our 400,000 bales
short crop, will leave you a light stock on sale on your
side. There are other houses on your side who will do
the same ; and I have no fears but, ia the end, all will
come out right. The Great 'Western, to sail, on the
13th, will carry out all the particulars of this arrange-
ment, and will probably reach you before this does. By
her I will give you my views more at length."
It is tolerably clear from what we have quoted, and
from a variety of individual opinions which have been
communicated to u., that the impression at Liverpool
is in favour of the genuineness of the circular, and that
it is generally believed to have been issued by or under
the express sanction of the Bank of the United States,
and that it indicates an immediate return by that
establishment to the policy under which it acted when
the ordinary channels of commercial intercourse be-
tween England and the United States were
broken up by the financial convulsion of 1837. It
may be a little presumptuous in us to set ourselves
against the general opinion in Liverpool, where
the means of information upon all matters con-
nected with the United States are so far superior
to any that can exist in this town ; but still we
cannot
sihelp
gsaying, that we consider the alleged cir-
cular beingot neither more nor less than a clumsy
f abr up for the purpose of imposing upon
dthue cin Eg ngl
merchants and manufacturers, and in•
c a atn
themsh to stand out for, or to give, higher prices
for cotton than the state of the market would other-
wise afford. And we are assured, in fact, that several