New-York tribune., 1907-11-09
COTTON CORNER RUMOR
SPECTATORS W4RNING.
Price of December Option Too
High, He Says-Report Denied.

|
OF the market, said yesterday that attempt
TO corner the December option was being made
by several prominent cotton firms in New York
and that, TO squeeze the shorts, they had ad-
Vanced the price of that option to a point where
1t bade fair not only to put a stop the export
movement of cotton. but also to cause ii to be
imported to meet the exigencies of the artificial
demand. In fact, he declared that reports had
been received yesterday that considerable guam
titles of American cotton were being shipped
back from Liverpool to New York for this pur-
pose, at time when the whole financial world
was relying upon the cotton exports to pay for
the gold now being imported He continued:
Ordinarily, at this season of the year, Amer
ica is a very large shipper of cotton to England
and the Continent, we'll to Japan. but the
exports since the first of September this year
are already some 100000 bales behind those of
last year, and the movement is relatively dimin-
ishing day by day. Four hundred thousand bales
of cotton, at present prices. are worth. approx
imately $2OO0O,OOO and 1t is plain that to this
extent the ability Of the United States to draw
upon Europe for its necessary gold supplies at
this season is curtailed"
After pointing out the important part the
American cotton crop plays in international
finance and declaring that the exports of the
staple had during the last three years furnished
average 80 per cent of the balance of
trade In favor Of this country. he added:
LARGE STOCK IN NEW YORK, HE SAYS
THE more conservative members of the cotton
trade are a good deal worked up the situa-
/ ton which has been created by this apparently
unnecessary corner and 1t is said that active ef-
forts are be made to bring 1t to the attention
of the financial powers that be The stock of
cotton at present in and about New York City
is valued at about $4,000 600, and 1t is said that
at least as much more, if not an increased guam
ylof
are allowed 10 carry out their purposes The
accumulation of S14O0OO00 worth of cotton in
New York in the present financial situation.
would. in the opinion of conservative men, put
an unwarranted strain upon our local banking
facilities and as this accumulation would be en-
| tirely unnecessary. and to that extent would alb
sorb the credit available for legitimate business
purposes, it seems not improbable that an at
tempt may be made effectively to discourage
such speculative enterprise.
"On the other hand. the firms identified with
the operation are believed to have large means
and very pronounced views with regard to their
right to do they please with their own and
! they have up to this evening succeeded in ad-
! vancing the price OF December contracts to a
! premium of forty points over the next option
! that is January-whereas in the normal course
of business December contracts would. 1t Is de-
cIared sell at forty points under January. The
!
"a a bale which Is the premium that is at pres
ent being paid in order TO attract cotton to New
York and prevent it's expectation.
SHIPS LEAVING IN BALLAST.
zone effect OF the embargo thus put upon ex-
| ports is shown by the fact that recently ships
! have left Galveston for Bremen i'm ballast be-
/ cause cotton to furnish them with cargoes was
not available although there from nine to
! ten million bales of cotton in the South yet TO
! be marketed out Of this years crop
/ Members of prominent cotton firms when
shown the above statement last night emphati-
! carv declared that no Corner was being at
/ tempted in the December option, and that there
| was not a word of truth in the assertion that
cotton was being brought back here from Liver
| pool They declared that larger percentage or
| visible cotton being exported now than at
| the same time last year, and pointed to the fig
| ures in THE Financial Chronicle" as proof OF
what they said and that it was plain that the
author of the reports that corner was being
| attempted and that cotton was to be imported
to bolster it u D was himself the short side and
was doing his best to discredit those merchants
| who we're long Of the December option.
Stephen NJ Weld & Co, cotton brokers, of No.
! So Beaver street, issued the following statement
/ in reply to the charges made by the speculator
already quoted:
! We understand that article has been sent
| to all the newspapers in New York by well
known cotton speculator, who requests that 1t
| be published without the use of his name, IN
which he says that because of the premium
existing in December option exports of cotton
| from the United States have been almost COM
pletely stopped" According to the last issue OF
/ "The Financial Chronicle the amount of cot
| ton brought into sight this year was 2,I31OOO
| bales and the amount exported 327 900 bales
| Last year the amount brought into sight to a
! like date !. 900 bales and exports were
! 1,669.0OO bales From this it appears the per-
! centage of the crop far brought into sight
! this year and exported is 4S.0 per cent,
against 40 per cent last year We think that
/ these figures alone enough to show that this
mans statement has no foundation in fact. In
| view, however, of the efforts made by those who
are short of the December option in New York
! to bring into discredit those merchants who
| long of that option. deem IL only just to
| selves to state our reasons for our position
Our firm is probably the second largest
| port house dealing in raw cotton in the United
! States. and as such we have made large sales
| TO foreign consumers. Owing to the firmness
| with which spot cotton is being held in the
! South It is very difficult for merchants such
as ourselves to purchase cotton there to fill our
| sales, is the ordinary course of such business
/ We are, therefore, long of December cotton
! with the purpose of requiring those who have
sold II to TO bring the cotton here to New
/ York in order that we may export IT and fill the
! sales to merchants and spnners on the other
| side which have already upon books.
| The maximum stock in New York on July 30
was 1924 bales. IT is to-day 124,SS9 bales
/ and is daily decreasing, largely owing TO
! sales out of New York stock for export. 1t will
/ continue TO decrease rapidly, and such cotton
as NAV be brought here on contract will be inn
mediately exported by Us, in fulhlment of our
! sales to consumers.
| It is not intention to attempt any corner
of cotton i'm this market. nor as long as we have
! any say in the matter viii any corner take
/ place In point of fact holdings of Decem-
( her cotton are sufficiently large to insure the
| nron,nt export of the cotton now i'm New York
and such cotton may come here hereafter.
Far from obstructing the export OF cotton