The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1900-02-09

And their mathematical relation to
each other may be expressed by the fol-
lowing equations in the first of which we
have compared the year 1890 with 1900
and. in the second the year 1891 with
1900
Problem IL equals price to which
cotton will go this year, assuming
relative analogy Of present conditions
with those of 1880:
1OO-2.966: l1S-3,634:: 1924: 2
Il u. %.
Problem III price to which cotton
will go assuming relative analogy Of
present conditions with those OF 1891:
1OO-3,54O: 1l5-3,634:: 9la: q
r. 1864.
In each of the above problems, we
have taken the consumption for the
first year of the comparison at 100 per
cent and assumed the present consump-
| ton to show respectively Is per cent
and Il per cent increase. which estimates
Of increase are about borne out by the
| increase in the total number of worlds
spindles as stated.
OF course such figures IA these while
| interesting may be misleading as the
| influences bearing upon cotton are too
many and their operation is too complex
| 10 admit of calculation being made of
| them as OF Il mathematical problem. But
| the conclusion to which they point viz:
| that cotton in relation to the present and
| prospective supply is still far too low
| seems to be indubitable. Meantime
much discussion has developed during
| the week with regard 10 the position OF
| the New York market. which, as COM
pared with Liverpool and the Southern
| markets. is relatively lower than for
many years past. Thus far this season
| il has been the policy of nearly all expor
! ters and carriers of cotton 10 hedge their
purchases of actual cotton, no matter
where located or in which direction ship
| ped, by sales of futures in New York.
| The effect of this volume of selling
| attracted here largely by the extreme
| latitude of our contracts has been to
| keep the New York market during nearly
| the whole season, relatively much lower
| than any other market in the world and
| naturally there has been no accumulation
OF stock ut adj here.
Gradually these sales of hedges as they
| are called, have been concentrated in
The summer months from May until
August with the result, in our opinion,
OF creating short interest in this mar
ket Of fully one-third of the worlds pres
ent visible supply or say about 100000
bales. For the protection of this short
interest there is in warehouses in New
York at present only 65.230 bales. of
which only 33,O1S bales are ''certitica-
ted and immediately available for de-
livery on contracts While these hedged
sales represent complementary purchases
elsewhere, and are for the most part
made against purchases either of futures
in Liverpool or spot cotton in the South
or in Liverpool, it is evident that the
longs are not an adequate protection for
the shorts at the present disparity of
the New York market. because cotton
cannot he brought here to fill the con-
tracts except at a very substantial loss.
The query therefore that presents itself
to every intelligent student of the sit
nation is how long this situation will be
allowed to continue before recognition
Of the real facts shall come to those
who have 50 boldly sold contracts here
and result i'll a spasm of buying which
will bring New York more correctly into
relation with the primary and controlI-
ing markets of supply and consumption.
AS far as we are able to determine
we are of the opinion that no attempt
TO corner the New York market is
likely to be made. We, ourselves. had
occasion during the present week most
emphatically TO disclaim any such inten-
ton. but it does seem to us that the nat
ural and normal operations of the law
of supply and demand will shortly bring
about Il very radical reimbursement of
the situation and such a reimbursement
seems to us imminent as far as the crop
movement is concerned. 1T is larger and
promises to continue for the next three
or four weeks considerably larger than
last year, but taking the season as
whole from now on we do not eynact
that as much cotton will come into sight
made its appearance during the same
time last year by at least 10 per cent
and probably the deficiency will be
greater than this. The movement is at
present swelled by the sales of cotton
which has been persistently held on
limits during the entire season, and as
sellers find buyers willing to meet their
views they are conSeryatively and wisely
pooling with their holdings
This naturally results in an increased
movement. but is rightly disregarded by
the trade and the effect of high prices
is to rapidly denude the South of cotton
and will probably leave us during the
summer months with the smallest re-
serve supply that we have ever seen.
With view of calculating the situation