The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1897-10-28
UNDUE DEPRESSION IN COTTON

UNDUE DEPRESSION IN COTTON
Colonel Alfred B. Shepperson IN Textile
| America.
Since the beginning OF the new season
on September / cotton has declined lSs
cents per pound in New York and CORE
spondingly in all American markets. The
I present price Of S-16 cents for middling
upland lis the lowest since March. 1880.
when sales were made at 5 9-16 cents-a
price lower than during any season since
1913. The price Is now liz cents lower than
year ago despite the fact that on the
! 18th instant the stock Of cotton in all
American markets was 100000 bales less
than at the corresponding time last year.
Not only this, but the stocks Of all de-
scriptions OF cotton in the European ports
! were 269 900 bales less than at the corre-
spending time in 1896; 991 900 less than
1895 and 7S4 900 less than 1894, while the
| combined stocks of European and American
spinners are very moderate and much less
than year ago.
The season opened with small supplies
and the actual statistical position was and
is strong. The chief causes of the existing
depression are the opinions held by many
spinners that our crop Will certainly reach
and may considerably exceed ten millions
Of bales; the unsatisfactory condition OF
the cotton spinning industry in England
With the fear OF strike in the near flu
ture in view of the proposal Of mill own
ers to reduce wages Of operatives; the de-
lt.Nr Np 1ln
continent in consequence of poor crops,
| etc; the temporary dullness OF the cotton
goods trade OF the United States and more
! especially In Fall River, and the liberal
| offerings of cotton by Southern interior
| merchants and brokers to Northern and
European markets at constantly falling
prices. do not think there will be
strike in the English mills. In my opinion
the persistent offerings of cotton by South
ern dealers have contributed to the depres-
sion more than all other causes in as much
as they indicated weakness and tended to
confirm the idea of very large crop. The
prevalence of yellow fever at New Orleans
and other Southern ports and the closing
of the offices Of some Of the cotton buyers
and exporters In each OF these places broke
up the business connections of many of the
cotton buyers and shippers OF the Interior
towns, and these interior shippers were
| forced to seek new connections in this
country and Europe in order to find an
outlet for the cotton which it was their
business to buy as marketed by the pro-
ducers, and to sell to Europe and the
Northern and Eastern markets. In order to
sell to new customers 1t was necessary that
they should offer cotton at lower prices
than the old correspondents of the firms to
whom they were seeking to sell cotton.
Thus sharp competition was started with
tho result that Northern and European cot
ton spinners and dealers were constantly
receiving offers of cotton at low prices.
Southern dealers in their eagerness to sell
would simultaneously offer the same lots
of cotton to several firms, and this would
cause the quantity of cotton so offered 10
appear many times greater than It really
was. A lot Of 1000 bales II offered to two
firms in each OF the markets OF Boston,
Fall River, Providence. New York and
| Liverpool would have the weight on the
general market of the Offering Of 10000
bales. and 1t must be remembered that
all of these markets are in hourly COM
muncatlon by means OF telephone, tele-
graph and cable.
Opinions differ as to whether the decline
| has now proceeded far enough or whether
the price will fall still lower before any
substantial reaction to better prices will
occur. It rs perfectly evident to me that
sooner or later a reaction must come. 1t is
only question of time, and the greater the
! decline, the greater will be the rebound
| 1t is always so. Taking broad view OF
the present and prospective supply and
demand and of the causes Of the existing
| depression, | think the decline in cotton
has been greater than the conditions war;
ranted, and that. therefore, moderate re-
action which might easily develop into a
! very decided one may occur at any time
Frosts in the cotton belt, or liberal buy
| ing by splnners investors or speculato-s.
would at once check the declining tendency
and turn the current OF the market quick
~ In the opposite direction. The very fret
| sign OF a decided reaction would un-
! doubtedly csuse liberal buying by Amer
loan and foreign spinners. who would SUD
cenly discover what they ought to know
now, that cotton Is cheap and safe in
Vestment even at prices considerably high
or than those now ruling, There is doubt
l.ss very large short interest" on the
New iork cotton exchange. No people are
as quick TO see the incoming of a rising
tide In prices as those gentlemen who sell
Tor future delivery thousands OF bales of
cotton which they do not happen to own
previous to the little formality of selling
H. When they scent danger and start In
70 nuy FUTURES 10 cover their short
salts they will rush the priNs up on
themselves and on the belated spinners An
advance In "futuros'' started by the Hyiny
| OF frightened bears" to cover their ..short
sales and sustained by the legitimate
ouying OF spot cotton by spinners would
quickly attract to catton the attention az
outside investors and SPECTATORS aud thus
pernlanently higher range CT prices
might suddenly result,
european aad American spinners alike
complained OF unsatisfactory business last
season, but the fact remains that on each
SIDE or the Atlantic considerably more
cotton was consumed than the previous
season, My friend. MIR. Thomas Ellison 81
Liverpool. the most eminent ana pains-
taxing cotton statistician In Europe has
Just published an estimate that Euroosan
aud American spinners will consume dnr-
ing the season 22s,ooo bales (of 500 pounds
nett more than Inst season. He ais, est,-
mates mat an American crop OF 1900, 900
oaies VIII be required In order to keen
STOCKS at the European and American mar
xs's ana mills At the close Of the season