Las Vegas daily optic. [volume] (Las Vegas, N.M.) 1880-1908, 1905-07-18
Departmental
Cotton Scandal

In connection with the dismissal OF
Edwin \, Holmes, the associate sta.
tistician OF the department OF agri.
culture, for manipulating the govern
men, crop reports. a dramatic side
light Is thrown upon the collapse Of
the great Sully cotton pool Of 1909,
that d%islocated the cotton manufac'
turing trade of the entire world. caus.
ed great distress to operatives. both
In the United States and in England
by closing mills, and ruined thousands
OF small spectators who followed the
lead OF Sully and PUT every penny
they owned or could borrow on the
bull side Of cotton.
When Sully started ont to work his
pool the growers and everyone else
interested In cotton at u high figure
were told that the advance in price
was perfectly legitimate, and was due
solely to the increased demand and the
decreased production. With the de.
mand constantly increasing for cotton
and the production falling off, 1t fol-
lowed rs a matter of course the price
would advance. Every rise seemed TO
justify the iron law of supply and
demand. Sully continually told his
followers not 10 sell, but to hold on
for higher prices, as conditions were
worse even than had been believed.
Everything wen swimmingly with
the bulls until the fall of 1909. The
bears had made desperate efforts TO
break the market, but without sue
cess. Private as well as government
reports all bore out Sully's assertion
Of n shortage of. crop.
Then in the fall of 1908 the govern
ment reports began to indicate that
the crop was not so short as had been
represented. This put renewed hope
in the hearts of the bears, succeeding
crop reports, II accurate. showed there
was no justification for abnormally
high prices, and bears went at the
market with hammer and tongs and
smashed the great Sully corner, the
biggest corner ever known. Sully,
who UP TO that time had been making
his millions in paper profits, went to
smash, owing millions, and ruin and
destruction followed in his wake. The
exact losses he caused will never be
hho"h, D"N ~ was III lht ttHS VI
millions.
Holmes was in charge of the Stats.
tics al that time and the evidence
upon which Holiness dismissal Is
based shows that he was interested
In men operating on the bear side of
the market and manipulated the re-
ports so as to help the bears. From
the evidence made public it does not
appear that he was on the bull side.
All his interest was in seeing prices
put down, and with Prices artificially
high this was a golden opportunity.
1t was an absolute certainty that a
government report showing that the
yield and acreage had been under
estimated would send quotations tumb-
ling, and anyone with advance know
ledge Of the report had merely to sell
cotton short and make a fortune. 1t
is a curious commentary on specula-
ton that a few figures juggled by a
! single man was all that stood be-
tween colossal wealth and absolute
ruin.
1t is the talk in Washington that
the end of this scandal has not yet
been reached, and that other officials
will have to walk the plank. The
southern cotton growers, who have
been pushing the investigation, who
compelled Secretary Wilson to order
the investigation. although at first he
made light OF the charges and as
serted most positively that 1t was i'm
possible for advance information to
leak out, are not satisfied merely
with the dismissal OF Holmes.
In the first place they believe
Holmes should be criminally prose.
cuted, and they think he can be held
on a charge Of conspiracy. Apart from
that, In their opinion. there are other
officials almost II not quite as guilty
as Holmes and who also ought to be
dismissed for the good Of the service.
Boston Globe.