New-York tribune., 1882-02-13
COIL1PSE OF SPECTL4TION.

| COLLAPSE or SPECULATION
| The "ringsn and "pOols' are smashing
Grain and cotton are falling and the specu-
lators who have so long defed legitimate in
| 1uences and the laws of trade are going into
bankruptcy. 1t is impossible to feel much
sympathy for their loss. They have claimed
the right to disregard all public interests, as
well as the private interests of vast number
of consumers, in their combination to put up
| the price of products, and with no better
| motive than to make money for themselves
| If individuals have right thus to cOnspire
against the public welfare, the rest of the peo-
ple have at least the right to rejoice when
they fail Under ordinary circumstances, the
public cares nothing for the strife of specu-
lators. and is quite Indifferent whether either
set of them makes or loses money. But the
speculation in products during the past SIX
months has done great harm to the country,
! and to all its legitimate interests and indus
| tries, and the collapse of this speculation will
| Justly be regarded public blessing.
The main and irresistible cause of the col
| lapse was the accumulation of unsOld stocks
| High prices brought out immense quantities
| of grain and cotton, as shown week ago
Europe refused to buy, at such prices,
| and the supplies in sight far exceeded
the consuming power of this country
| The spectators were forced either to give up
| the struggle or to carry enormous and surely
| increasing stocks on to the opening of a new
| season, when the prospect of ordinary crops
| wonld make their ruin inevitable and complete.
| As always happens in such prcdicameDt, some
| proved unable or unwilling to face further
| risks When the selling began, it was like
| the opening of leak in u great dam. Last
| week the fall at Chicago was from to
| cents per bushel, and on May options at one
time nearly cents. The fall in No. red
winter wheat here, from Saturday the 4th to
Saturday the 1lth, was from 81 44l2 to 81 40
in February options 5li cents March 6ai cents,
April Gl2 cents, and May G3s cents. The per-
nicious system of dealing in options, which
enables gamblers to affect the market by pur-
chases of nearly fifty times rs much wheat or
cotton as they are able to pay for. involves
them in enormous losses when their control of
the market fails, for they are then compelled
TO settle, not only for all the product there is
in the country, but for many times as much
"phantom =" wheat or cotton that has been
bought at high prices Last year the sales in
this city alone amounted to AS AL, 700 bnSh-
els of wheat and 30,659326 bales of cotton,
though the entire quantity received in this city
had been only about 45, 600, 900 bushels Of wheat
and 175,O00 bales of cotton. The gambling
contracts at Chicago in grain have been much
larger and at Southern cities in cotton have
been enormous.
II is a mistaken idea that the liquidation of
these gigantic speculations will Immediately
set free large sums. If one set of men SELLS
another set buys; if one releases his money
the other ties up an equal amount. Not 4
dollars worth Of relief " can come to over
loaded markets until accumulated grain and
cotton have been sold to foreign consumers
and payments have been made When free
exports begin, bills will be sold against grain
and cotton shipped, and the money market
will then feel the effect quickly. But prices
have not so declined rs yet that the move
ment for export is free, and foreign buyers,
who have waited long in the belief that
American prices could not be sustained, will
he encouraged by moderate decline to exer-
else little more patience. Mr.. EIlison's an
nual cotton review, which was republishcd in
this city last week, arrays great mass of
figures to prove that the current low
estimates of the American crop are erroneous,
and that British spinners can force decline
of prices to the Liverpool basis by refraining
still longer from large purchases. Whether
he is in the right or not, his advice is likely
to have great weight in Europe.
The immediate effect of the collapse of
great speculation is necessarily unpleasant.
As one firm after another is forced into bank
ruptcy, compulsory sales of securities and
other property occur; banks are compelled to
have resort to good securities held in order to
get back money loaned; prices of securities
decline, and payment Of other loans is de-
manded distrust spreads and people who have
money to invest hesitate TO buy until the
future is more clear. Thus the failure of
cotton firm last week caused heavy sales of
stocks considered abundantly good but these
sales caused depression of prices, other sales,
calling of loans from other parties and in
creased reluctance of investors. These are
naturally the first effects Of succession of
failures, or of severe pressure caused by n
fall of prices, in any important branch OF
business Bat the liquidation will neyerthc-
less do great good in the end, though its i'm
mediate effects are undesirable. 1t will give
more solid basis hereafter for legitimate
business and for investments. 1t will in time
clear the money market of IL tremendous load
of products now unstable, and of heavy loans
made to carry them. 1t will lessen the danger
of a severe drain of gold from tins country,
in case of continued disasters in Europe. If
the collapse Of grain and cotton speculation
proves complete, the effects upon other busi-