The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1904-02-06
HERE
NOT HEAVY LOSERS
Cotton Slump Has No Serious
Effect Locally
EXCHANGES KEPT BUSY
Margins of 81 on All Cotton Orders
Are Now Being Required-About
$4,000 Spot Bales Have Been
Handled In This City.

Handled in This City.
Very few SPECTATORS in Birmingham
were seriously hurt by the heavy slump
in yesterdays cotton market, but local
exchanges had a busy day hunting cash
for margins and keeping themselves on
the safe side of the rapid transactions.
The Birmingham exchanges are now re-
qulring margins of 81 a bale on all cot
ton orders. and IL the market continues
its wild fluctuations it is probable that
they will call for margins as high as $40.
Formerly these brokers were willing to
put orders on the exchange with a margin
of 81, but the cups and downs" have been
gin many of them would have suffered
heavy losses
For the information of the unsophisti
Gated in cotton speculation it might be
well TO explain that margin is an ad-
ditional amount of money placed on de-
| post so that If a traders principal is
lost, and the market continues to go
down or up, as the case might be, the
exchange will not suffer a loss In other
words If 100 bales of cotton are bought
at $780, and the fiuctuation in prices wipes
out this amount and goes further before
the deal is closed. the margin will save
the broker from q personal loss. Trad
ers who are well known are often al
lowed to go beyond their margin, and then
required to pay the loss. If they are not
well known and the broker allows the
order to stand. he will have to pay the
| difference provided the Spectator is fin
ancially unable.
On Ordinary Occasions.
On ordinary occasions a -Aargin of 81
is safe, but when such violent slumps as
that of yesterday occur 1t is with difficult
| ty the exchange is safs with as high =
margin as 81. In New York commission
houses are cal',ng for margins of So
Local b., '.ers and SPECTATORS say that
nobod,a in Birmingham has been ser-
| c-s5iy hurt by the slump as nearly all
| of them had pulled out of the market
before the deluge of selling orders sent
prices downward. The high margins have
alos kept many out. To invest in 1000
| bales of cotton now a speculator must put
up $SOO0 $1,000 of which is in margins.
The local spot market has not been
seriously affected by the slump as buyers
have been holding aloof awaiting calm
err market After the close yesterday
! 1S1s cents was offered for spot cotton but
neither buyers nor sellers were anxious to
close deals. The highest price paid for
cotton in Birmingham this season was
16 cents. Few bales however, were sold
at this price. Mill men say they cannot
afford to spin cotton at that price and
consequently have waited for decline.
Blrmngham's Volume.
During the present season about $1,000
bales of cotton have been handled in
Birmingham and from the sales of Sep
TENDER, October, November. December
and January the average price paid was
II cents At $65 bale this would amount
to So, AIS 900. The greater part of this COG
| ton has been sold to spinners In Alabama
and the two Carolinas There were sew
here yesterday with cotton to sell but
the best offer they could get for spots
was 1919 cents and this they refused. A
we'll known spot broker said that while
he made the offer he was glad 1t was not
accepted.
In the Birmingham exchanges 1t is said
the heaviest dealers in cotton here live
in nearby cities and towns like Tusca-
loosa, Montgomery, Bessemer, Selma De-
catur, Gadsden and Admission. One broker
says that he has paid over 500 $50 in profits
to buyers in Tuscaloosa alone.
The Pluneers.
Cotton men in the small towns are
much nearer what are called 'plungers"
than the local spectators. These coun-
try merchants as a rule put in their or
ders ami let them stay for several days
relying entirely on their own judgment
and not on the quotations as they are
marked up on the board.
This is explained by a broker by the
fact that when men are trading on the
floor and see the quotations marked up
every few minutes they become nervous
and close out with small profits or losses.
The man in the country does not know of
the fluctuations until the market closes
and can then base his judgment for
another day on this information.
OF the 5000 bales of cotton handled here
this year, buyers estimate that not more
than $500 bales were brought in on wagons.
That is. not more than that amount was
raised in wagon distance of Birmlrg-
ham, Some of the smallest towns in the
state handle more wagon cotton than this.
Few farmers in this district pay atten-
ton to cotton as trucking has been found
more profitable until this season.