St. Landry clarion. (Opelousas, La.) 1890-1921, 1906-12-08
FARMERS VICTORY
OVER SPECULATOR.
Wonderful Change In Marketing of the South S
Staple in the Past Three Years--New Orleans
Essentially A Spot Market.

/ Try buyer TO pay Che price asked ane
TO hurry up the shipment. In which
event, the relatively higher price the
exporter pays for his spots over his
hedges means dead loss to him
Next time the exporter sells forward
shipments to the spinner, he adds on
"a few points to protect himself against
the farmer. But the farmer repeats
his former programme. for the method
lis progressive, and takes the extra
points and few more besides away
from the buyer. After while the
premium demanded by the farmer
grows so great, that in self-defense
the "hedged' exporter begins to work
for an advance in the future market
in order to equalize the price of
futures and spots. This done, he is
enabled to sell out his futures and
buy in his spots without loss. The
thing works like an endless chain, be-
cause except when prices fully meet
the farmers ideas, he demands and
gets few points more than the mar
ket price practically every time he
sells a bale Of cotton. The mills
have sold for future delivery all the
yarn they can spin during year to
come, and must have the cotton. The
exporter can not default in his raw
cotton deliveries, for that would mean
financial suicide. The bear speculator
can not depress spot values and the
Ahedged' spot short can not permit
him depress futures because he knows
the farmer would promptly advance
the premium at which he IS holding
spot cotton over futures.
New Orleans is essentially a spot
marked, and its future contract,
based as It is upon natural conditions
Of supply and demand, reflects this
revolution in conditions recounted
above; whereas, the New York con-
tract, which is SO framed that dog
tail' and other unspinable cotton
may be delivered by the short at a
profit, favors the speculator always,
consequently never reflects conditions
existing in the actual cotton market.
And this is the reason why cotton
values at New Orleans have ranged
well above those at New York ever
since the farmer began bargaining
with the buyer some three years ago.
Every time Liverpool merchants at
tempt to buy cotton in the South,
that market rises about 100 points
above New Orleans, where it belongs.
Between times, New York spectators,
finding they can not depress New Or
leans except at heavy loss, turn their
attention to Liverpool with temporary
effect.
The cotton market can not get.
along without the speculator, who
occupies the same relation to the
spot dealer that an insurance com
pany holds towards the house owner,
and who is entitled to a fair profit
for the risks he runs. But with the
spinner at one end, prosperous and
able to pay eleven and even twelve
cents for raw cotton, and the farmer
at the other end, prosperous, wise to
the game, and able TO demand and
collect such prices, the speculator
can not obtain any more than an
equitable share of the profits.
Proof Of this is found in she fact
that in the aggregate spectators
have actually lost money by their
operations during the past year, and
are readjusting their affairs TO meet
the changed conditions brought about
by the intelligent attitude of South
ern farmers generally.
The Southern States can not sup
press speculation in cotton at New
York and Liverpool lbear markets
naturally, therefore beneficial prohi-
bitiye legislation in the Southern
States will be extremely difficult to
devise. But with the farmers in every
country Of every cotton growing
State sitting on the Lid, as it were,
price control win probably soon cease
to bother the man who does most Of
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