The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1897-11-21
Cause OF Low Prices for Cotton.

The persistent and continued decline In
the price Of cotton, experienced during tn,
last two months. stretching over longer
period without reaction than has ever beer
known In the history OF the trade, has at
tracted universal attention and provoked
much discussion. Many theories, besides
the large crop theory. have been advanced
as to the cause, but none Of them will fully
account for the trouble. There is one con-
ditioh, however, that. in our opinion, has
more to do with the low price Of cotton
than anything else, but which has hardly
been mentioned. We refer to the large
number Of buyers In the country wiring
bids for the spinners and others, at fig
ures below what they can buy the cotton
prices down and keeps them going in that
direction. A large number of small buyers
scattered all over the cotton belt, many OF
them without financial responsibility, OBJ
serving a weakness in the market, deluge
the market with bids by wire at lower
figures than they can buy for at the time.
thinking that the market will be lower the
next day, and that each one lis the only
person who cuts prices. If they get orders,
and the market is lower the next day, they
may fill them. If not, they let them go by
default, and no one can hold them to ac-
count.
On the other hand, spinners and their
agents and large buyers generally, receiv-
Ing so many bids at lower than the market
figures, conclude that the market will be
lower the next day, and postpone their
purchases. This creates the impression that
the supply Is greater than the demand, and
breaks prices, so that the next morning all
markets come in lower. thus justifying the
anticipations of both the spinners and the
buyers in the country. And so the staple
continues to tumble, as has been observed
during all this season.
member of our firm was In spinner
agents office about one hour not many
years ago, and during that time con-
tinuous procession of kilograms kept pour
ing in from all parts of the country. Offer
Ing cotton less than could be purchased
on that day in any part of the South He
was told afterward that about 100 tele-
grams had been received that day, offer
ing thousands OF bales where they only
wanted hundreds. Why should we wonder
that the price of cotton Is not sustained
under such business system? Would not
any one who. for example. wants 100 bales
ana is ofered thousand at lower prices
than he expected to pay, defer his pur-
chase In the hope OF still lower prices?
And this applies not only to offers made
to spinners in this country, but also to
those in England and on the continent AS
the number of irresponsible buyers in
creases every year. there Is little hope OF
cotton values, unless the sys-
tenn is changed And nothing will change it
so quickly as return to the old fashioned
factorage business. II the bulk Of the cot
ton were shipped TO responsible factors, as
Of old. the shippers drawing for what they
need for their pressing necessities, allow
Ing the factor measure OF discretion in
The disposition of the cotton, the offering
and pressure to sell would be reduced to a
minimum, and prices could be maintained
This could be done the more easily as the |
actor would not then have to meet the |
reckless competition OF so many interior |
buyers. Every one with extensive expert |
snce in the cotton business must have OBJ |
served that NO such decentralization Of |
prices ever occurred when cotton was sold |
almost exclusively through cotton factors.
VIM. D. Cleveland & Co.,
Houston. Texas,