The record-union., 1899-09-30


swindle the cotton exchanges of the
country
The panic was due to an apparent
terrific jump in the price of cotton,
based on alleged Liverpool advances,
and it was roughly estimated that
$4,000 had been lost on the local
transactions as a result Later in the
day the exchange, after receiving Legal
advice, declared null and void all fu-
ture transactions of the day. This ac-
ton, however, promised to be bitterly
contested, and litigation is likely to be
the final outcome. Business here will
not be resumed until Monday
The market at Liverpool opened 3-32d
lower on spots, and 4-64d lower on de-
liveries, as compared with yesterdays s
values, and continued without material
change for some time Then the wires
became hot with tales of rapidly ad-
vancing prices. They started up one
half of sixty-fourth at time at first
and then jumped 1-64d, 11a-64, 2-64
and 211a-64 in quick order until the net
advance up to 9:45 local time show
ed 41-64.
In the meantime New Orleans had
opened under thesinfiuence of the Liver
pool market, advanced II to II points
higher than last evenings closing, and
quickly climbed 80 points additional.
Then the explosion came. With an
unaccountable advance of 81 facing
them, operators began to receive cable
grams from Liverpool asking the rea-
son for the heavy gain in prices in this
market, and stating that prices in the
English market still stood at about the
opening figures.
These cable advices, in the face of
from 10000 to $4,000 sold and pur-
chased, threw the operators into a
frenzy of excitement, and they surged,
shouting and gesticulating about the
ring as President Parker rushed to his
desk and summoned without the usual
formalities, meeting of the exchange.
Amid tumultuous scenes a motion to
suspend business gasped out by wild
ly excited broker, and with tremen-
dous shout it was unanimously carried.
The news of the excitement of the flop
in the meantime had spread like wild
fire through the business districts and
Carondelet street, in the vicinity of the
exchange, and the bucket shops were
ager West of the Western Union Com
pany, as soon as he got wind Of the
sensational advances, set his wires to
work with messages of inquiry to New
York, Replies We're promptly received,
directing that all specials in reference
to Liverpool fluctuations be held until
they could be confirmed by the 4 p. m.
report.
In the face of these reports and the
advices from Liverpool President Park
er convened the directors early in the
afternoon, and it was then concluded to
close the futures market until Monday,
in order to permit the brokers to re-
cover from their shock, and enable an
investigation to be concluded fixing the
blame for the remarkable blundering or
the responsibility for the conspiracy.
At the same meeting the board sum-
morcd its. counsel, E. D. Saunders, and
asked an opinion from him as to the
legality of the contracts that had been
made under the misapprehension.
Having been informed that all con-
tracts made this day. said Mr.. Saun-
ders, were based on false reports from
Liverpool as to price, I advise you that
the consent essential to valid con-
tract was wanting, and the contracts,
therefore, are void"
Upon the basis of this opinion the
contracts were declared off. The curb
stone brokers, or at least some of them,
protested against the action of the
board in declaring contracts void, and
claimed that they were not governed
by the exchange. Other brokers were
likewise of the opinion that the ex-
change had exceeded it's authority, and
threats We're freely made during the af-
ternoon of a resort to litigation to de-
termine whether the contracts should
stand or fall
To-day was the first time in it's his
tory of thirty years that the New Or
leans Cotton Exchange has been COM
PEELED to suspend business. During the
panic of 1893 a similar attempt to sus-
pend was made, but failed The ex-
change took the ground then that sus-
pension would injure it in the markets
of the world The directors feel that
to-day's suspension was unavoidable
and excusable.
A statement in relation to to-day's
panic was given out by officials of the
Cotton Exchange late this afternoon.
Referring to the false quotations, the
statement says:
"All of the Liverpool dispatches quot.
ed came through the regular channel,
the Commercial News Bureau of the
Western Union Telegraph Company,
which has been the news conductor for
the various Southern exchanges for
more than quarter of a century past.
The explanation of the company is that
the changes reported were to be con-
strued as against the closing price of
yesterday but as the invariable custom
heretofore has been to give all changes
in the Liverpool market compared with
the dispatch Immediately preceding, the
explanation is not only unsatisfactory,
but indicates negligence somewhere,
little short of criminal"
A DIPLOMAT DROWNED.