The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1897-10-24
As TO HOLDING COTTON.
Members of the Waco Commerce.
Club Express Views.
BETTER TO SPECULATE IN FUTURES
THIN in Spots Because the Percent
age of Probable Loss Is smaller.
Do Not Advise Speculation.

Waco Texas, October 2s.--The persist
scending scale despite reports OF a short
yield and the strong probability of short
age before another crop is made, furnishes
a puzzle that absorbs attention just now
Every farmer who comes to town asks the
question Of the first acquaintance. do
you reckon cotton ever will go up?" The
answer is not always the same but a large
majority of them are in the Affirmative.
In fact, the opinion is almost unanimous
among cotton men and merchants that cot
ton will soon check its downward course.
reverse and shoot upward, Just as wheat
did. The reasons for this opinion have
been stated over and over again by others,
and 1t is useless to give them here. How
ever the principal one-and one which has
seldom been advanced-is that nearly
everything else has risen in price, and cot
ton must assert itself sooner or lator. The
complaints OF the farmers that they can
not afford to sell cotton At the present
price IL there is any possible chance 10
avoid it have been the means III exciting
a grea. DE- al of interest, and have provoked
animated discussions AS TO whether or not
the farmers should hold their cotton for
| the anticipated rise. Some of the business
men who believe they should brought the
matter before the officials OF the CONNER
| cial Club several days ago, advocating the
establishment Of a free cotton yard tor all
| who wanted to hold their cotton. Upon in
| vestigation, however, 1t Vas ascertained
| that Ralli Brothers manager was Offering
| storage free at their compress, and that
| number OF commission merchants were
| offering liberal Inducements to farmers 10
| store their cotton, and that the banks were
| offering to advance literally on cotton
stored The establishing OF free cotton
yard was therefore abandoned.
| In discussing the subject. the question
| of whether or not 1t would be wise to en-
| courage the farmers to hold their cotton
| was given thoughtful attention. President
| Kirksey, OF the Commercial Club, alter
| reflection, decided that IL would not. He
] said 1t would be better for the farmers to
| sell heir cotton as soon as they could get
1t TO the market. and II they wanted To
| risk anything on the prospect OF rise IN
the price they should buy futures. He be-
lieves that course would be the safest and
| most remuneratiye.
MIR. II. II. Shear, vice president and
manager OF the Rotan Grocery company
was Of the same opinion. Mr.. Shear said
no man could afford to hold spots unless
he had money TO buy corner ON the sup
ply.
BY figuring a little on the expense at
tached to speculation in epots where the
cotton is held and In futures where the
fieecy Is invisible. we find substantially the
following result:
100 bales spots sold at s cents per
pound ...............-...$ 2ooo "
| 100 bales futures at 1 cent advance,
| less cost, 500 ...........-..... 400 W
Interest on s2400 for one month. 70 o.
Total ~. ...... ......... $500 OF
100 bales spots held one month and
sold at ] cent advance ........ $4,000 0l
Storage for one month at 81 per
bale 800; interest on $500 for
one month, s24.16, making in all. 12f II
Total .........s 2s75 g.
Difference In favor OF futures. S44 II
The 81 storage covers all CHARGES. In
,, GLIDING insurance, weighing, sainping
selling and shelter.
1t might he said that the storage item
might be eliminated by the farmer hoidinl
his cotton at home. The Ioss on 100 halei
, exposed to the weather one month woult
amount 10 more than 500. Now. whei
tbs element Of risk les considered there u
, found a still greater difference in favo
of futures II farmer sold 100 bales To-
: s2500 and bought 100 bales futures and tn
5 price fell one cent he would lose $500. re
ducing the amount received for his cotto
to $4,000: but IL he held his cotton he wonl
not only have lost the same amount Il
the decline. but would be out tina cost