Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-08-08
TO STOP c0RNER|NG
irs-.sL
Movement to Obtain Legisla-
tion BY Congress.
DEALIN.G|s5oN MARGINS
AGITATION FOR ABOLITION OF
SPECULATIVE TRADING.
Daniel Sully on the Outlook for Cotton
NO Probability Of Coal Famine
What It Costs to Run a Yacht.
Special Correspondence of The Evening Star.

Special Correspondence of The Evening Star.
NEW YORK. August 7. 1903.
A determined effort to stop ';eornering' In
the products of the soil will be made at the
coming session Of Congress. Prominent mill
men In Philadelphia are reported to be en-
gineerlng movement for such legislation.
having been advised that Congress can
take such action because 'cornering'' cot
ton Is In violation Of the act prohibiting re-
stratnt OF interstate and foreign trade. It
Is pointed out. however, that the southern
states are not the only places in the world
where cotton can be grown. Africa, as
Egypt has proved, can produce a splendid
nber and legislation which would interfere
with trade might destroy the industry in
this country. Those who oppose the pro-
hibitory legislation say that the only way
to check "cornering" is by bringing popu-
lar and business opinion into such shape
that the acts of men. the tendency Of which
Is to paralyze industry and to aid foreign
competitors, will be regarded as so dis
reputable that they will finally cease or at
least be reduced to inconsiderable numbers
and influence.
On the other hand. those who wish to
prevent cornering'' say that the robber
barons of old. who seized merchandise in
transit and would not let traders pass
through their dominions without paying a
heavy toll. were no worse than men of the
present age who buy up all the offerings of
commodity, for the sake Of producing an
artificial scarcity which will enable them to
advance prices and make extravagant
profits The robber barons used the force
OF arms Tho modern makers Of corners
rely upon the force which comes from the
possession OF money. Their control OF the
markets Is as immoral as was the old rob-
Der barons' control Of the highways of
commerce. and a government which derives
Its power from the people must sooner or
later find a way to protect the people from
the exactions Of the men who conduct
corners"
Dealings on Margins.
A cry is now being raised here to stop
dealings in stocks on margin. A prominent
barker declares that whenever there Is a
period of prosperity IN this country a set
of stock gamblers" proceeds to strike
blow at progress by over-speculating on
margin and by oyer-dotation of watered
stock. After time the bubble bursts,
prices collapse failures are announced con-
fidence Is shaken and the trouble, which
started in Wall street as a result of specu-
Ia tive excuses. communicates itself to
outside legitimate business. which but for
this cause would, have continued active
along lines of normal expansion. The only
remedy. he thinks. is to enact laws rigidly
restricting the capitalization of companies
SO that 1t shall always represent actual
values. and prohibiting entirely trading on
margins.
Not only the excuses In the stock market,
but the corner In, the cotton market, have
served to revive to some extent the agita-
ton for the abolition of speculative trading
by law. Ten years ago there was a deter
mined but unsuccessful effort to pass what
was known as the Hatch anti-option bill,
which would have stopped all trading in
options and probably closed most of the
produce and cotton exchanges in the coun-
try. 1t Is not strange that. in view of the
corner In cotton. there Is a revival Of that
agitation. This cotton corner. 1t may be
said. has inflicted more injury to the bust
ness Of the country than the excess in stock
speculation. The effect OF the lotter is, as
yet at least. merely sentimental. But the
effect OF the cotton corner is direct and Sc
vere It has closed mills. checked exports
and produced semi-stagnation in the cotton
goods trade. This in fact. Is the only fea-
ture of the business situation that is now
distinctly unfavorable.
Evils Of Over-Speculation.
Commenting On this matter. a financial
authority says: There is no question
whatever Of the evils Of overspeculation,
which is only another name for gambling.
Whether the gambling takes the form Of
imitation OF prices Of stocks by pools or
individuals who are able to carry large
blocks of securities on margin, or whether
1t takes the form of a corner in cotton or
generally more Injurious in the latter. As
q matter of fact, most of our panics are
caused. or at least are introduced, by
collapse of such imitation in prices as the
result of speculative excuses. But to pro-
hibit option and margin trading by law
would be a cure worse than the disease.
The uses Of speculation are 80 many that
the fact that 1t is SO easily and SO often
abused is not sufficient reason to abolish
1t altogether. The action of Germany sew
eral years ago. in .abolishing option trad
ing In grain, was attended with results
more injurious than any of the evils of
speculation would have been. The practi-
cal question Is not that of the prohibition
Of speculation, but the checking of over
speculation"
Does Not Expect Lower Cotton.
Daniel ]. Sully. the ex-cotton king, and
w. p. Brown. the reigning monarch Of
that staple were both on the floor of the
exchange few days ago. sully said x
do not see anything that seems to mean
lower cotton. The closing of many mills
does not mean lower cotton. The price of
cotton is not controlled by the action of
the mills, and there is no reason for any
one to say that the mills have closed for
lack Of business. There IL a demand for
cotton goods and there will be an Increase
In the price Of the manufactured article
II 1t is in fact too low-until it reaches the
proper level at which the mills can buy
cotton at the price which natural conti.
lions make and manufacture 1t at a Iegiti-
mate profit" Brown refused to say any
thing for publication. but he is busily en-
gagged in the market.
The Coal Output.
Although the coal miners have threatened
to fnaugurate q strike next year while the
presidential contest is in progress, there II
no probability. Of q coal famine like that
experienced year ago. The tonnage so far
this year has already far outstripped that
n ha ant fxyalVa he ne O,x.
movement Of this trade Is now said to be
on a more conservative and satisfactory
basis than ever before in its history Az
a result Of mutual confidence and thorough
understanding nthe properties are In strong
er position than ever before. and the work
ers are on basis where they profit by the
increased value OF the coal in open mar
ket. The minimum price Of coal has been
practically fixed by the general government
for a term of three years from last No
vember. Thisdhas decided bearing upon
general trade conditions. and the retailer
and consumer are sure OF tho strength and
soundness of the trade az q whole. The