The Atlanta constitution. [volume] (Atlanta, Ga.) 1885-19??, 1892-10-11
A Great Evil and the Remedy.


mere nor less than speculative gambling
Mr.. BlOss claims that the laws Of sup
| ply and demand regulate the price of
cotton, and denies that it is controlled by
commercial rings. Such rings, he asserts,
are formed to advance prices, and not to
depresS them, and if successful they help
the farmers. Among other sweeping
statements, he declares that the alleged
cotton rings and syndicates are not aided
and abetted by the bankers. The specu-
lators operate for the purpose Of making
money, and do not care which way the
market goes, provided their operations
suit the way the market is going. II out
siders are less successful than those on
the inside it is because they undertake to
wrestle with an unfamiliar business.
The editor of Southern Commerce re-
plies at some length to this letter, and n
summary of his points will be Of general
interest. According to this expert, it is
| legitimate to speculate when you invest
money in the actual purchase Of thing
and obtain possession of it. Then, it is
| all right to hold 1t for q better market.
| 1t is not gambling; it is real business.
But future speculation is widely different.
| The buyer does not possess himself of the
| property he pretends to buy, nor does he
| intend to possess it. He merely puts up
| about per cent of its value, and keeps
that stake good as a bet that the market
| will go higher. He does no strengthen
| the market, as in legitimate speculation,
by retiring his purchase and reducing the
amount of offered stock. Men are tempt
ed to avoid legitimate speculation, when
they can take Il future without the ex-
pense of carrying. This tends to depres-
sion because the sellers are the strong
side, and control market quotations by
the machinery Of the exchanges.
Dealing in futures was very frankly
spoken of by the dealers themselves, be-
fore they feared legislative interference.
Then, they talked on squeezing the
lambs" and "shearing the lambs and
chuclIed over the ease with which they
made money. Now, however, they are
very guarded in their talk.
The syndicatcs very modcstl disclaim
their great power, but we all know what
aggregated capital can do, and the pamph-
in favor of future dealing show how will
ing these spectators are to spend money
to defeat the anti-option bill.
Future gambling has overthrown the
laws of supply and demand, as the follow
ing will make plain:
In the season of 1SS1-S2 the cotton crop was
nearly 100000 bales less than the preceding
crop, caused by drouth, and evident to all
from the first. Prices that season started at
about l., cents. 1t the universal opinion
held by northern spinners as well as by south
ern merchants and producers that prices
would surely go to 10 cents, or higher, because
Of this shortage. That was the natural out
come of the situation. This view led to vast
purchases of futures by the south. Our peo-
pie then thought that future speculation was
a fair risk like other speculation and did not
understand the tricky manipulations Of future
dealers. So they bought and bought. on the
strong prospect Of advance. We remember
the season well, and how people of all classes
invested in futures, so strong and reasonable
was their confidence IN cotton New York
sold all these "futures"-over 33, 900, 600 bales
that year. the largest sales ever reported up
to that time. Now. there nothing I'M
usual that against the cotton trade,
and, under the laws of supply and demand,
this crop shortage of nearly 90 per cent should
have advanced prices materially. But did
It? Not at all. For New York having sold
these immense quantities of futures, put on
the by her manipulation, and instead
of prices advancing they were pressed down
about 20 per cent, and held down until spring.
Then having squeezed out the lambs and
captured their margins, the pressure was re-
Taxed and prices quickly regained some cents
per pound and reached nearer their legitimate
level. But by that time the crop of the south
had been marketed at the low price of the
future manipulators. Now, If the laws of
supply and demand still prevailed why did
not prices advance this great shortage of
supply, as every intelligent cotton man ex-
pected? There is but one honest answer to
this question, viz: That future dealing has
suppanted these great laws, and by the ma
nipulatOn of that powerful band Of New York
future sellers prices were forced down against
all the favorable influences of the situation
and in direct opposition to the laws Of supply
and demand. This is the irresistible conclu-
sion These facts appear in the congressional
testimony, and are supported by the New
York cotton reports Of 1SS1-S2.
How can the supply of futures regulate
prices? How many bales of futures are
ever available? Ten millions, fifty mil
lions, one hundred millions-an mex
haustible supply. Now, does not this
inevitably depress prices? 1t must-it can
have no other effect.
siders nearly always buy, especially here
in the south, where there are nine buyers
to one seller. Memphis has lost $1,000
600 in this manner within the past year,
and every locality in the south has suffer-
ed correspondingly. Who got it? Look
at the recent big increase of funds in the
New York banks. Is it not a natural
presumption that the banks and money
rings, finding it easier to depress than to
advance prices, stand in with the members
of the New York Cotton Exchange who
are selling futures?
Note how fiercely these New York flu
ttlre dealers fight the anti-option bill.
They have sent delegations to congress
to argue against it, and they have spared
no pains to get it postponed. But their
gambling business is in serious danger,
now that the people understand it. AS
the Memphis paper says:
1t ~ vicious system-an unspeakable
wrong. Our southern people are its victims