The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1903-12-24
BIG COTTON PRICES
Vow Will Cost OF Raw Mate
' rial Effect Prosperity
MUCH COMMENT Is HEARD
What Is to Happen to the Cot
ton Industry.

New York, Dec 23.-The violent rise in
price of cotton. during the last half OF
last week, the fury with which specula-
ton for the advance was resumed, and
the fact that contracts for May delivery
sold above the corner price" of last
.ully-have brought forward into Keen
controversy the meaning of this strange
situation. No enc could approach the
ueighborhood of Hanover square, those
Two days, without overhearing repeated
and eager discussions of The following
questions: How will such a crop and
such prices affect American prosperity!
How will the southern planter end the
season? What is to happen to our cot
ton industry? What caused this weeks
sudden rise, when statistics of The time
were against it? When is the extraordi-
nary movement on the cotton exchange
TO end?
1t will be observed that sure answer
to each Of the above cited typical ques-
tons depends on the truth as regards the
size Of the cotton crop, says the Post.
Two different answers may be given TO
each OF the questions, according as The
answerer assumes that the crop will be
below 10000. coo bales or above 1OOo,Wo
If is neither wise nor safe to base any
= ositive argument on the movement OF
the present market. The cotton market
now has passed into condition such as
was occupied by the stock market IN
April. 1901, or by the wheat market IN
May, 1898 On both those occasions the
striking phenomenon was that believers
IN lower prices fea"ed II sell short,
because they had been so frightfully pun
fshed in previous ventures of the KIND,
while believers in a further rise went
beyond all bounds, on a tacit or ex-
press belief that such speculation was
.afe for any one 4 frenzy of this sort
has undoubtedly seized on the cotton
growing and cotton-trading community;
but it would still be rash to predict an
Immediate outcome similar to those of
1901 and 1898 Much depends on the force
Of the speculative ball already rolling
much on the actual facts of the situa-
ton. The public and the spectators, IN
the two years referred to. were mistaken
as to the underlying facts. They pc
lieved. in 1901. that people of boundless
wealth were buying stocks with their
own money. and buying them to Keep
whereas the fact WAS that the buying
vas effected through us ng borrowed Ia
ciities to the point OF exhaustion They
believed in 1898 that Joserh Letter con-
trolled all the visible supply of wheat,
and that invisible supplies in farmers
hands were exhauster; instead of which,
the Tightening of the Chicago corner
after April. literally doubled the move
ment of corn from farm TO market. IN
some respects. the action of the wheat
farmers in 1898 resembled this seasons
action of our cotton planters, up to date.
That is TO say. high prices, based on be-
lief in short supplies, were met that sea-
son. and have been met in this by ac-
tual increase in shipments from the
farms.
The years high price of cotton has. up
70 the present time. been an immense fl
nancial advantage to the South as com
rnunitv. and a corresponding detriment
70 the North The Southern planters have
Anus far sent more cotton TO market
than they sent in the same weeks of 1902.
and have received for it 80 to 90 per cent
more than they then received. 1t is
hardly strange under such conditions.
that bank reserves in the section should
have increased IS 100000 since last year.
or nearly IS per cent; that Southern bank
clearings for November should have risen
j per cent over 1902 and that skeptcism
as to the maintenance Of existing prices
should be taken by Southern traders and
newspapers as equivalent to wishing mis-
fortune to the section.
But II must equally be recognized that.
in so far as the present price is based
upon expectations of an extremely def
Gent crop. the eventual benefit TO the
South will be problematicaI. If the short
age were really very serious. then clearly
the planters as a whole would be in the
situation Of the corn-farmers of 1901 when
the price of corn went from 46 to Il cents
per bushel. without really lettering the
average farmer On the short cotton
crop theory shipments from farm 10
market, Just now largely above last /.
Years, should presently fall to figures (
purely nominal. But this would mean (
that the planters profits Were over for /
the season.
II would also mean, of course, that the |
American spinner would be badly |
squeezed" in getting material fer manu-
facture, and that the cotton export trade. !
towards the end of the season, must fall /
TO practically nothing. Under normal /
conditions cotton exports. even in mid /
summer. should contribute to 10 million 4
dollars monthly TO our outward trade. /
But with crop of 9.9dN.ooo bales OF less.
our future cotton exports would normal /
ly be as much below last years As the /
export in November and October was
above it, This would affect international I
exchange.
IL. on the other hand. ii is true that /
the cotton crop is actually 10. 700 200 bales !
or more. then the planter will have sold ,
fully half his crop AT extraordinary fig
ures: our outward trade will have been
stimulated by the foreigners haste TO
buy. and our spinners will be able 10
make up lest ground later on. But this
would not then be done on the basis of
lS-cent cotton. Before such situation
could come as has just been outlined the
speculative situation would have 10 he
radically changed. In the case of wheat.
after Letters famous rush to 81 o. per
hushel in May OF ls9S, the price touched
O. in August
HUNDREDS OF POOR