The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1904-12-17


Bales. Argues that Spinners Look
Upon Present Low Prices IS Mis-
fortune. Majority of Farmers Have
Received Full Prices for Two-thirds
of Their Crop.
The New Orleans G'Imes-D Democrat
publishes q careful analysis of the
cotton situation from the pen of
Frank b. Hayne, the big bun opera
tor who was the central figure in the
market last year and who is supposed
to have endeavored to stem the tide
of decline this year. The analysis at
tacks the accuracy of the government
report and that of the Times-Demo-
crat, which so closely approximated
1t. 1t SuStainS the estimate of TheO-
dore II. Price of some days ago, OF
something more than 100000 bales.
Taking up market condition, he
further undertakes to prove that,
granting the accuracy of the govern
ment estimate the present price of
the staple. He pins his faith to the
cotton.
In conclusion Mr.. Hayne urges the
farmers of the South to hold cotton
until such time as the approximate
value, at least should be received.
In full the article follows, refer
ring first to the Times Democrat es-
innate of 11,940,000 bales, and then
to the Bureau report:
you my views regarding the cotton
situation and what is the best course
for the South to pursue in mark et1ng
the remainder of this crop, / viii
state: First, the South should bear
III mind that it is possible the govern
ment has overestimated the crop. An
error of only five per cent would
make a difference of nearly 10000
bales i'm the size of the crop, and as
the Bureaus estimate, after all, is
simply a consolidation of the SuesseS
of their various correspondents, a fiVe
per cent mistake is by no means an
impossibility. 1t seems strange that
the Cotton Exchanges of the country
whose members are composed of
practically everybody who sells and
buys the crop, should uniformly have
estimated same so far below the bu-
reau's figures. The estimate of your
paper was the nearest approach to the
governments estimate, and you GER
tainly must acknowledge that a i've
per cent error i'm your returns would
be BY no means improbable. Per-
sonaijy. | confess that / cannot believe
that a crop practically picked ana
ginned by the first of September can
nave reached these figures.
"A few days before the last ginnerS
report came out Mr.. Theodore h.
Price stated that If the figures showed
100000 bales had been ginned It
would indicate crop of l1,022,0OO
bales as he had received adVlces from
thousands of reliable CORRESPONDENTS
throughout the entire South that what
ever amount had been ginned TAP 20
the middle of November would be So
per cent. of the crop. AS the GIN
ners' report showed 9,786,000 bales
had been ginned the crop thus indi-
Gated would be 11,121,000. For NV
self, | cannot help but believe thai
this estimate of Mr. Theodore Fl.
Prices correspondents will be nearer
the mark than either that of the Blu
reau or of your esteemed paper.
The Price Of Cotton.
But never mind what the size OF
the crop is; for some time to come
the world in general will believe the
Bureau estimate is correct. The ques-
ton therefore is: If the crop is -
million bales, what should be the le-
ultimate price of what remains I'M
sold? | think everybody will acSnowl-
edge that if last years crop and this
years crop had both been eleven mil
lions 10 cents for either year would
have been considered the minimum
price for cotton. | therefore cannot
believe that the unequal distribution
of 10 million last year and 2 million
this year should mean that cotton nov
should only be worth Z IL cents II
is my opinion the governments report
was SO mucn larger than expected
that the trade is demoraiized at pres
ent: but in short time the facts OF
the case will be realized, and cotton
will regain its legitimate value.
"A great many of the Souther;l
newspapers seem to think that While
this low price for cotton is misfor
tune to the planter it means an enOr-
nous prosperity to the spinner.
think this is a mistake, and that the
majority of spinners. not only in
America but in the balance of the
world. would much prefer that cotton
should not have declined as much as
it has Last summer when cotton
had declined from s cents to 10 cenrs
every sDecuIator and every produces.
of cotton were bearish, everybody was
selling the fall months around ID
cents In spite of this bearish feeling
and the enormous sales of future con-
tracts the market would not decline
but remained steady for months
around those figures. There was no
bull speculative interest at that time
whatsoever: the market was sustained
entirely by the spinner either buying
future contracts or spot contracts from
exporters, who would buy the futures
to cover the sale of same. At that
time everyone was predicting an enor-
nous crop of twelve million bales or
over, and yet the spinner was willing
to pay 8 IL cents. The spinner has
bought cotton up TO next July on thar
basis, and | cannot think it is to his
interest to see cotton as low as it is
at present. The Spectator who sold
this cotton without hedging with FIJI
lures profits by this decline but the
spinner certainly is hurt by it, as he
has bought the raw material at high
prices and now he may have to ac-
cept low price for the Goods manu-
featured out of same.
Even if twelve million bales have
actually been grown it is certain that
if the farmer could hold back one
half TO three-quarter million bales
cotton would certainly sell very much
higher than it is at present
II received a cable from a very con-