Savannah morning news. [volume] (Savannah) 1868-1887, 1883-12-21
COTTON.
The Crop and the Price

tue new 1Ork commercial and Financial
Chr0atcse, in an article on the prospects
oil cotton, commented ON the prospective
scarcity OF the staple in the ensuing sum-
mer, and remarking that there was every
sign and probability of a corner and
higher prices that year, concluded with
some such words as: "But when did
cotton ever do as it was expected to do?"
The Chronicle was right or wrong, as YOU
choose to regard it, for there was no
corner, and the price went down.
Experience shows us that whenever the
general public marks out a course theo-
reticalIy for the price to take. as n
matter OF fact, 1t takes exactly the oppO-
site. The reason is that speculation
anticipates the movement, discounts it.
ana, being then disappointed. naturally.
when the time for Imagined fuIfIIment
arrives, reacts upon itself, and hence the
contrary movement.
Inc present season is case in Doint.
AT the opening of the season the general
IDEA was that the crop was short. and
that prices were going up. Free buying
under this idea did for a time put prices
up; IN fact, prices advanced over a cent
a pound: This advance has been followed
by period of depression, gradual. tedi-
interests looked to better prices: and
now we lind that the greater part of the
early advance has been lost. Despite the
predlctlons OF comparatively short crop,
tne receipts, instead of diminishing. have
increased as the decline continued. and
latterly nave reached figures beyond all
precedent. Now the bull element has be-
gun to waver-shall they abandon their
cherished idea of a small crop and ulti-
hlUhnr nd 1.
wreck what they can by selling out as
best they may those contracts from which
they tondly hoped to derive so handsome
profit?
AS for myself, am not interested to the
extent of single bale either one side or
the other; but to my mind the recent enor-
nous receipts are no indication that the
crop is larger than currently estimated in
September or October. Even with the
heaVy receipts from plantations last week
about $4,000 bales-the excess to date
over the amount in sight two wears ago
did not reach 100, 900 bales; and that wear
the crop was only ), ,450, 900 bales. Hence.
to make 6,OO0,O 600 this year we must gain
ABOUT 4OO,OO0 from now on over 1S81-S2. /
believe the late heavy receipts are in a
large measure attributable to the decline
in the price.
A large part of the cotton planters are
natural bulls, and will hold for higher
prices as long as possible, marketing only
so much OF their crop as may be required
10 realize money enough for immediate
wants. NOws suppose that when the
planter receives 10 cents for his cotton.
his margin of profit is 2 cents: then a
community requiring, say about $4,000.
could obtain it by selling about 900 bales.
as the surplus of profit over what was
owed on the cotton would about amount
to that sum. If the price advanced a cent
higher, they could then realize $4,000 by
marketing $50 to 700 bales, as the net
profit would be cents; but if the price
declined cent the margin of profit would
then be narrowed to l cent, and they
would be compelled to sell no less than
1000 bales to get the $4,000 clear re-
qulred. This is a simple explanation of
the apparent paradox so often noticed and
commented upon that squirt in prices is
followed by falling off in receipts and a
decline by an increase. With from 2,300.-
600 to 2,S0O,OO0 bales still in the country
to hear from, and with such extended
railroad facilities, navigable rivers and
good wagon roads as everywhere reported,
1t is not remarkable that as much as 305,-
900 bales should come in sight In a week
at this OF all seasons, and after the recent
decline. Let us then wait while longer
before branding as false those positive
and well nigh universal reports of de-
ficient yield, which even New York almost
unanimously credited month or two ago.
Under such confused and confusing cir
cumstanceS OF crop and of speculative
position, what are we to look for in the
future as to prices? If receipts keep up
pretty well through December and the
greater part of January, there seems no
help for the market. The 'bulls," WAC
have held on so long that they will soon
begin to tire, will doubtless begin to let
go, and in so doing depress prices con-
siderably and still further aid the decline
by thereby squeezing yet larger proper
ton OF the remaining cotton from the
country. In this case, with the weak
''bulP' interest weeded out of the market,
and nearly all the cotton sold, the position
of the staple will be very strong, and a
"boom" may be confidently anticipated in
the early spring.
On the other hand, if the sharp falling
OH - yclept perpendicular = occurs
shortly, the "bulls" will become imbued
with fresh vigor-the 'bears" will be dis
mayed-DredictiOns of only $4,000. 900
bales" and of IA cents next spring. will
circulate freely; prices will not be longi in
advancing at least as high as the point
from which they have already declined,
and probably higher, as the advance
would lend strength to itself by enabling
many planters to hold back for the IA
cents in the spring, and receipts would
promptly still further diminish. The final
result would then most likely be, as usual.
disappointing. AS spring came ON the
bulls would be ''loaded up;" by degrees
it would become evident that the crop had
been actually underestimated, and was
sufficient and more at the price of IL or u
cents for the worlds wants, and the expe-
rience of two years ago would be re-
peated.
On the whole, looking over the situa-
tion in a general way, l can see no
good reasons yet for increasing the esti-
mates of the crop above 5,750,0O0 to
100000 as a maximum. Consequently,
see no adequate cause for the recent
decline of &c, and barring external infiu-
ences, such as political or financial trou-
bles, | consider it as likely to be recOy-
cred. 1 do not believe the receipts will
continue excessive much longer, and it is
not unlikely that we have already seen
the worst. Finally, while, as indicated
above, there is some chance of a further,
and perhaps sharp, decline within the
next month or so, l believe it is pretty
safe to predict that the spring and sum-
mer months will ultimately go consider
ably higher than they are at present.
DEMOCRITIS