The Union times. [volume] (Union, S.C.) 1894-1918, 1905-09-29

NESS, nc Qld not think that cotton
mill ought to buy from hand to
mouth, nor did he think that a cotton
mill ought to buy cotton between the
first day of September and the first
OF January and store it. In his
opinion this was more of a specula-
tive venture than the mode of buy
ing cotton which he inaugurated
here. Mr.. Duncan's idea was, and
from what can gather he was the
first to inauguratc it in this State,
to buy. cotton on what is known as
call contracts" This system OBJ
waited having buyers in the field
and having cotton stored for the
bulk of the season.
In other words, he made con-
tracts. with responsible firms like
knoop, Frerichs & Co., Inman,
We'll Brothers, Knight & Yancey
and the Jones Cotton Company and
others. Of these firms he would
ask at what price over the New
York market would they sell 1000
or 10000 bales for future delivery,
so many bales month, from Octo-
Der to February, inclusive. They
would seemingly sell cotton at New
York prices plus 40 points on each
months contract, he having the
right to fix the day for the call,
which would fix the price during
the particular month that the de-
| liyerieS were made
| TIE CALL FOR CONTRACTS.
These call contracts were made at
40 points above New York prices,
but this varied for the current
month in which the deliveries were
made, the prices to be called during
the month or any one day. The
4O points covering carriage of the
cotton and the delivery at the ware
houses in Union.
Whatever day was received for
the ''call' fixed the price for the
particular month in which the de-
livcries were made for the entire
month, and settlements were made
on this basis at the end of the
month. Sometimes the firms had
to make up the difference in the
months settlements, but recently
the balances have gone to the cot
ton buyers at the end of the month.
For instance, if last June cotton
was selling at Z cents in New York,
he could call a contract any day
that month for June deliveries at 7
cents, plus the 40 points for ex-
pcnses, and that would fix the price
during the entire month for the de-
livered cotton.
The price of cotton went up con-
stantly while Mr.. Duncan had these
call contracts" and in that way
he lost considerable money for the
mills upon the basis of the call
contracts.
In fact, the losses run quite upon
the call contracts basis. If, how
ever, cotton had gone down, he
would have made considerable for
the mills. So, to reduce the aver
ages, Mr.. Duncan sold cotton fu-
lures for the two mills, and with a
constantly rising market money
was lost on both ends, that is, at
one time on contracts, as well as
lupon the futures that had been sold
in the effort to reduce the averages
Of cost.
Hedging the loss, it is claimed,
would have done no good.
THE LUCK CHANGED.
1t is claimed that this system was
worked out all right heretofore for
the Union cotton mills, and that
the only considerable loss was that
which was undergone during the
last twelve months; in fact, the
bulk of it since the first of last jan
uary.
The Union and Buffalo cotton
mills consume about 5000 to 81, :
600 bales OF cotton per annum, but
it has been suggested that in his
effort to retrieve the losses that had
been sustained cotton futures were
handled upon larger scale on Mr..
Duncan's personal Judgment, and
that as much as three or four cents
a pound was lost on the cotton.
| Cotton dealing at its best is very
complicated, and it is rather diff
cult matter to explain these delicate
details to even those who have some
idea of the complexities of such
transactions, but whatever may be
the ins and outs" of such finan-
i (ceHtiauea on page ~