New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1906-02-16
THOMAS COTTON CORNER
VII Take So, 10000 to Finance
Plan-F0rmerS 4pprore.

Reports from the South show that the farmers
there are beginning to take up L. r. Thomas's
proposition 10 buy 100000 bales of cotton at IL
cents ? pound and the financial district in this
city Is beginning TO watch with a good deal OF
interest for the results Of the young banker :
venture into cotton speculation. 1t is admitted
that there is a good opportunity for a big bun
market in cotton if the thing is worked the
right way. but there is good deal OF skepticlsni
over whether success viii be the outcome OF TINS
attempt There is a we'll defined opinion IN con-
sentative cotton quarters that the plan is hedged
about with too many conditions to meet With
great success.
1t is generally admitted that the statistical
position Of cotton points to bull market, but in
the face Of this the price is down and seems 10
be going lower. March cotton is selling now
around 10 Sc with stock of only about 10000
rales in this port. With this the fact say the
conservative dealers, why does Mr.. Thomas otter
IL cents a pound? If he really wants hun
market. why doesn't ne buy up at the present
market price tho certifcated cotton in New
York. and Immediately the price would jump?
The whole position of the staple points to this
Tie visible supply of American cotton on Sep
tember l. 1905, when the picking of the new
crop began. was approximately 100000 bales.
The estimated crop for the season of 19oJ-'O6
WAS 10 100000 bales This gives total seasons
supply of 12140O00 bales. If the estimated
consumption is put at the conservative figure OF
II 100000 bales. there will be a Surplus Of only
$4,000 bales This in itself is a bull argument
and if MI Thomas took out of the market ooo'-
600 bales of cotton he would create an almost
unprecedented position. while the taking OF the
175OO0 bales at this point deliverable on March
contracts. would put the market in tight place
and force the price much higher.
Mr. Thomas and his associates are going in
for the long pull They are beginning a cam
paign which they expect to carry over INTO
September and possibly well into the new crop.
If the plans work out they arc laid, they will
not only control this seasons prices, but will
control large part of next seasons crop
While the estimates show only a balance of
G40O00 bales after the consumption of this sea-
son is provided for, the actual figures of mar
keted cotton available show that there now re-
mains in the South something like 100000
bales of cotton. But a large part of this is al
ready sold and is at the railroad stations, or at
gins, or awaiting delivery on future contracts
1t is believed that the unsold part Of the crop
will not run far over 100000 bales. Mr.
Thomas's offer limits the grade OF cotton he viii
take TO "middng" This is the only grade he
will pay Is cents a pound for.
This constitutes both the strength and the
weakness of Mr.. Thomas's position. Cotton is
divided into various grades. but unless the
sellers have a certain proportion of ''middling'
to mix in with the lower grades the cotton is
not a good delivery. and the spinners viii not
accept il. In a supply of q million or a million
and a quarter bales t would he unusual to find
more than 100000 bales of 'middling cotton.
Mr.. Thomas's proposition narroWs down then,
10 the plan to eliminate all the 'middling COT
ton from the balance of this seasons supply. If
he can do this he will have the futures at his
mercy. for the dealers cannot make delivery
without taking his cotton at the price he chooses
to name for il. In the mean time 1t is under
stood that he is buying futures in the market at
prevailing prices. ranging from around IuOO
for March to 1880 for November.
Mr.. Thomas expects to be able TO carry out
his plan by reason of his arrangement with
Harvie Jordan. of the Southern Cotton Grow
ers' Association. Mr.. Jordan, as the representa-
tive Of the majority of the farmers, agrees that
the cotton shall be delivered to Mr.. Thomas in
stead of being sold in the open market 1t Is
also agreed that Mr. Thomas shall have his
pick of the first 100000 bales of next seasons
crop. About 100000 bales of cotton are picked
in August as a rule, and about 100000 in Sep
TENDER This arrangement therefore is calcu-
lated TO give Mr. Thomas control of the market
up to about October or November, with devel-
opments beginning to show in May or June.
Mr.. Thomdss offer is to take 100000 bales Of
"rniddling'' cotton on before July l next.
Consequently he has until that time to accept
delivery, while the crop is tied up from the min
ute the offer is accepted. It IS estimated that
Mr. Thomas and his associates Will have to put
up about 50 900 900 to finance the scheme. the
Southern banks will lend within $40 bale Of
the market price Of cotton.