The times and democrat. [volume] (Orangeburg, S.C.) 1881-current, 1904-04-06
COTTON FUTURES.
Is it Gambling for a Person to Deal
in Them?
OLD COTTON DEALERS OPINION.

The Difference Between Speculation
and Actual Investment. There
Lies the Moral Of the
Whole Question.
To the Editor of The Sunday News:
Together with many other Christian
ministers, have been perpleXed about
Cotton futures. / have, therefore,
sought the opinion of a brother clergy
man, who was for many years in the
cotton business; both at home and
abroad. With the hope that many
Christians nay appreciate the jmpor-
tance of che subject, I append his re.
ply. Clergyman.
an not surprised at great many
being perplexed over the Futures"
situation and great deal of harm
has been done by men talking Of bust
ness problems who do not know any
thing Of the subject and will listen to
no argument from those who do know,
such as one or two whom I know and
could name. Even with the number
of years experience I have had in the
cotton business feel it subject that
requires great caution in its treat
ment. AS I believe there is good and
bad in it have treated it as looking
upon it from both sides in an impair
tial manner. 1t would be a splendid
thing if a law could be passed and
enforced prohibiting employees from
giving speculative orders without the
written consent of their employers,
but as we do not live in the millen-
mum such could never be done. am
hand in glove with any sensible plan
that will stop gambling amongst
young men.
Your first question: Is dealing in
cotton futures any worse e>than dealing
in corn, wheat or meat futures?
Answer: I have never dealt in any
thing except cotton and do not know
enough about these other articles than
to express a mere opinion. No, 1t is
not.
Second question: Is it gambling?
Answer: AS a hedge, Explained in
my paper,) no, but as a bet with the
bucket shop as to whether the market
will 60 up or down, yes. Also, If the
article is below the cost Of production
and you demand the cotton you have
bought on future contract, no. 1t is
then an investment.
Third question: What is the dis
tinction between gambling and legiti-
mate speculation? is fully covered by
my paper.
The subject Of dealing in cotton
futures is one that can call for con-
siderable amount Of controversy both
pro and con, and it is with no contro-
versial desire that this article Is pen-
ded, but, instead, to try and show
how in certain aspects dealing in cot
ton Futures" is just and legitimate,
whilst from another standpoint 1t can
be made nothing more nor less than
gambling of The worst form and now
adays more so than u few years past,
when the cotton market did not en-
gage the attention to the same extent
of those who were prominent in the
financial world, and who can to a
greater extent put up" sufficient
margins to cover their paper con-
tracts" either on the "bear" (those
who sell what they have not got) or
the bull" side (those who buy what
they do not want) and iu both. cases
have no idea Of receiving any actual
cotton on their contracts or vice versa
rendering any at the due time.
First of all then let us look at cot
on, futures" from the gambling"
end. A man goes into either the
"bucket shop" or the exchange and,
after looking over the quotations on
the blackboard, gives his order to buy
or sell a certain position on the board
(tbe different months are called posi-
tions) which he thinks good one to
trade in, he may be an outsider, un-
able to tell a bale Of low middling
from one Of strict good middling, has
never owned an ounce Of cotton (eX-
cept possibly some absorbent ecotton}
in his life nor does ever intend to own
any. With this sale or purchase, as
the case may be, he puts up, or rather,
did put up to within the last year or
two, cne dollar per bale margin and,
,,pnhln mako fntllrn
contract through a respectable house
for less than one hundred bales, that
makes to all intentS and purposes 4
bet of one hundred dollars that the
market, If he has bought one hun
dred bales: viii 80 up or, If he has
sold, that it will 20 down so many
points from which lie hopes to take in
profit plus the amount OF margin
put up, and more often than not these
hopes are doomed to be shattered and
the margin wiped out and in these
days Of rapid fluctuations at times
considerably more gone besides. With
some genuine bucket shops' it is
also almost entirely brace game, as
no, mercy is shown to the lambs who
are so easily Shurn. Look at this
pure and simple gambling from an
other standpoint. In the bucket shop
or even legitimate house that furn-
ishes free on the blackboard to all
who come in the quotations, you see a
number Of young fellows, clerks in
offices or stores, giving on the quiet
their orders to the manager. They
may have saved up the requisite mar
g.. o,,,,,onc;nu m "trudnn n n6