The Colfax chronicle. [volume] (Colfax, Grant Parish, La.) 1877-1981, 1906-12-22

C0tt0u Price Control.
New Orleans, Dec. l7-Fnr thrs
years the cotton trade the worI
over has been amazed because III
price Of actnai cotton at New o,
leans. the principal primary ma rker
u relatively higher than at New Yor
and Liverpool, but only In the yer
recent past has the real reaspn Il,
this reversal of the logical order q
things cOttonwIse l,een generally M,
derstood. aud the awakening ha
added much potential force to tn
Iarfiiers power az u price maker.
A very few years ago the produce
OF cotton. burdened with mortgage
and debts ri all kinds. accepted gen
orally without question Or profess
the price offered by his merchant o,
city factor, and most of the none,
80 realized was quickly absorb
ca by usuriuus interest rates and
0vercharges for plantation supplies
This condition Ut affairs gave the
balance VI power to the consumer
and IN the natural course of events,
the speculator came to set the pace
which buyer and seller alike followed
Tor many years. Thus the middle
men or exporters. the man upon
whom the spinner relied TO round
Mp his supplies. and on whom the
country merchant counted az a con-
slant customer. sold cotton ahead
which he did not possess. In the con-
fident knowledge that when the time
cnine tn sell his future ''hedges'' and
buy In his spots for delivery to the
spinner. the transaction would mean
clear profit to him. In additian to
his regular commission, because he
himself and his allies were the price
dictators.
This was the actual condition of
af1airs mp to three years ago. But a
silent force had been at work during
two or three years prior to that
time. Big demand and compara-
lively high prices had really brought
partial prosperity to many farmers,
and many a mortgage has been lift |
ed. and not a few farmers have be- |
gun to carry over cash balances from
one year to another. Then came |
the memorable speculative bull cam
paigu of the New Orleans operators
Of 1904. which left many millions Of
dollar In the pockets of Southern
'olks, money which was promptly
utilised IN throwing of the old yoke.
Coincident with this. occurrence.
The farmers began to learn as Judi
the advantage al holding
heir cotton when the market WAS
and By experience found
hat the boosted independence OF the
Iuyer was 4 sham and Il fraud, be-
'sbuse the mills could not operate
Without raw cotton supplies, and
onld not indefinitely ex tend the date
i delivery In order to assist the men
whose contracts they held. This
inowIetge instantly revolntionizrd
be cUttun business, aud before the
plnner and the exporter realized Just
THAT had taken place, two cotton
rops had been soll at a valuatl on
nhanced by more than $lOO. 600. 100
'vsr the aggregate value old stan
Rris would have brought. II
Thus within three years experience
long practical lines has taught the
lrsner how to market bis cotton to
be best possible advan tage when
he price is advancing. The new
,ethOd Of marketing, which means
Ems ri millions of additional profit
. the farmer every year, IL worked ,
nc In this way: The spinner buys
stton for forward delivery. Just al (.
Z has done all along. The exporter {
Ills 1t to him. But the farmer. who :
Ills to the exporters buyer, refuses /,
> accept the price offered, and de-
't]as~so <eAs usSsOuoS tCu vi tSSH utly =
olnts. or maybe decides. the market
too low, and says he wants to :
AIT n while. Before long the ex- I
Dgter's contract becomes due. and
: wires bis country buyer to pay !
~ price asked and to hurry up the :
lipment. In which event. the rrla- 4
vely higher price the exporter pays Z
e his spots over his hedges means !
dead loss to him. Next time the ),
porter sells forward shipments to I
'e spinner, he adds on few points {
} protect himself against the far 2
er. But the farmer repeats his for
er program. for the method IL pro-
'esslve. aud takes the extra points 8
III few more besides away from n
'e buyer. After aw lille the premium {