Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1882-03-09
Mgistellaneons &eadina.
GAMBLING IN COTTON.

Ml5CRllahRDA5 @RAalug.
GAMBLING IN COTTON.
An article on the above subject, in our issue
of last week, copied from the New York Times,
though written in a light vein, contains many
facts more seriously and elaborately stated in
the following New York correspondence of the
Charleston News and Courier, and either arti-
Gle conveys an important lesson:
Is it of any use preaching a sermon on spec
ulaton in your neighborhood l heard one
to-day from an old broker, and as the subject
particularly under discussion. was cotton, per-
haps it may interest you. lie told me last
week that the recent high rates for cotton
were due partly to the fact that in some towns,
every man, woman and child took a ''hyer" i'll
cotton now and then. 1t occurred to me to
get from him some account as to the meth
DDS and channels of losing money on the Cot
ton Exchange of New York.
cit is fact" said this broker, (which is
more and more apparent to me the more see
of this businesS-and l have seen dealing in
cotton for forty years-tlat there is no such
thing as good judgment in cotton speculation.
1t is all luck from beginning to end. | have
known men who have devoted themselves for
cotton fluctuations, only to lose all their money
by acting upon their deductions. The ups and
downs in cotton are due to no appreciable
cause Sometimes when the shrewdeSt judges
agree that it must 60 up, it will so down, and
vice versa You can also say that looking
back over career of forty years, | cannot re-
member half dozen spectators in cotton who
have made money and kept it, and on the 9th
er hand, / have known scores of men who had
made fortunes and lost them because they were
unable to keep from specializing. Once aspec-
ulator, always a speculator. 1t is pure gamb-
ling, and every one knows that the Western
gambler cannot stop. l know three men who
have each made several fortunes out of cotton
and lost them all again. Experience, shrewd-
ness, knowledge of the market, all 60 for moth
ing in this business. Some Southern people
think that because they are on the spot they
can estimate the probable crop of the future
They get bitten worse than others, because
they operate on a restricted view Of the field
My experience has been that the inveterate
losers at this game are the Southerners who
know all about it.
s'The Cotton Exchange came into existence
in 1871, when the old Merchants Exchange,
where the CustOmhouse iSnow, was found too
small for the daily meetings of merchants.
Until the organization of the Exchange, very
little speculative business was done. Some
years ago the mania for buying and selling cot
ton that did not exist, or had not yet been
grown, came into existence and has dWarfed
all legitimate transactions The last report to
the members of the Exchange gives some no.
tion of the proportion which speculating in
cotton has attained in proportion to legitimate
transactions. During the year ending May27,
1881, actual cotton was sold as follows: For
export, 143, ,262 bales for spinning, Isl ,911
bales for speculation (holding in store for a
rise,) 42, 1873 bales in transit, 3,1G0 bales; to-
tai, 310, ,916 bales, which represents the entire
strictly legitimate business of the Exchange.
During the same period rs, 721 500 bales were
sold and bought for future delivery-that is on
paper, no actual delivery of cotton taking
place. So that the actual cotton transactions
bear to these Oh paper a proportion of about
one to seventy-five.
GAS told you last week, cotton is quoted
at so much pound in cents and hundredths
of cents in time we may get to thousands,
and quote cotton at 12.334 pound. We
recognize fifteen grades of cotton, as follows !:
Strict ordinary, the poorest quoted good Or
dinary, strict good ordinary, low middling,
middling, strict middling, good middling,
strict good middling, middling fair, strict
middling fair, strict fair, fair, good fair and
fine This last is used by jewellers and for
such purposes. All cotton contracts in which
the quality is not mentioned are made on
the basis of middling. Cotton is divided
broadly into two divisions, upland and 'gulfs'
the former coming from North and South
Carolina and Georgia, and the rest from the
Gulf States and Arkansas. 10 the majority
of brokers the quality of cotton never enters
into the calculation, for they have no more
intention of buying actual cotton than actual
figs. An expert is able to distinguish any
one of the grades mentioned from another,
but the average Speculator or scalper-they
all call themselves brokers by the way-docs
not know the best grade from the worst.
''We have four calls day, the Call being all
action at which the auctioneer puts up and
asks for bids upon lots which members desire
to SELL The price obtained goes forth as the
official quotation. All transactions are made
on the basis of 100 bales of middlings weighing
45. 600 pounds Brokers charge 81 for selling
or buying 100 bales for Il member of the Ex-
change, in case they give up the real name of
the buyer OF seller. But as many members
do not wish to be known, and refuse to allow
the broker to disclose the name OF his prlnci-
pal, the broker has to assume the contract,
and charges 81. 80 for it. TO outsiders the
broker charges $3.50 for buying and $3.50
for selling each 00bales, or S25 for the turn
us it is called. The man who buys 100 bales
on speculation HAS 10 sell Cllelll again vi cOulSe
The margin required by brokers is S225 for
100 bales A change of one point, or hun
dreth of cent, in the market is equivalent to
81. 80 on the 100 bales, onc-hundretho of a cent
a pound on Al, 900 pounds. If cotton falls fif-
ty points 1260 to l2.10 for instance-a
nuctuation that is not unknown-the entire
margin of the unfortunate speculator is wiped
out. and unless he is able to put in more
money, or, in the slang of the Exchange put
up more margin, his one hundred bales are
sold out. A lively day Oh the Exchange is
characterized by fluctuations of at least thirty
points; we had one day last week when there
was a change in value of thlrty,five points.
On the quietest days of the year the variation
may not exceed three points.
lit will naturally be asked: How do the
thousands of cotton spectators make liv-
ing? Where do their profits come from !?