Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1907-09-17


of bales have been bought in utter
disregard of New York, or other ex-
changes.
1t used to be that the buyer Of spots
made his calculations on a basis OF
given number of points under New
York. During nearly the whole OF the
past year these same buyers have been
making their calculations on the basis
of a given number of points above New
York.
Now, we do not want to be under
stood as suggesting such an absurdity
as trying to ignore the laws of supply
and demand. These laws have always
controlled and always Will control
But heretofore, in their application to
the price Of cotton. these laws have
ruled principally among the exchanges
of Liverpool, New York and New Or
leans, and except to very limited ex-
tent, the producers Of cotton have not
even been parties to them.
One gambler on the cotton exchange
sells another 100, 500, 1000, or 10000
bales of cotton, according to his means
or his daring. The price, of course, is
fixed somewhere in the limits Of con-
ventional figures, the figures obtaining
at the time Of the commencement of
the transaction. The seller never ex-
poets to deliver nor does the buyer
ever expect to receive. AS a matter
of fact the probability is that neither
one is able to put up the amount OF
money that would be involved. Both
understood that the whole transaction
Is based upon speculation margins
the f1uctuation in prices between the
time of sale and delivery. If cotton
goes up a cent, the seller of one hun
dred bales loses $500 and the buyer
makes $500. and II 1t goes down cent
vice versa. And whether 1t goes up
or down a cent depends only incident
ally upon the amount Of cotton that Is
actually available-not nearly so much
upon this as upon the number OF gam
blers engaged in similar transactions
and whether the odds in total amount
of money involved Is on the side oi
the sellers or buyers. Supply and de-
mand of cotton may cut some figure In
the transaction: but the determining
influence Of the cotton is not nearly SO
great as the preponderance Of nerve
and dollars.
The real relations Of supply and de-
mand to the price Of cotton depend
first on the demand for manufactured
goods, and the ability Of the mills to
supply that demand. II the mills are
easily able to supply the demand FOL
manufactured goods, then there Is not
so much call for more mills, or sc
much demand for raw cotton. If the
mills are unable to supply the demand
for manufactured goods that means
more mills and, Of course, the demand
for more cotton.
OF course, anybody can understand
that when the farmers raise more
cotton than the mills can use, the price
of cotton must go down. 1t Is not dill
ficult to see how the price can be con-
trolled by the unnecessary surplus. II
the surplus is in the hands OF the
mills, it depreciates the price or the
cotton in the hands Of producers
Holding on to the surplus, however
the producers can use it to protect the
price of the necessary supply.
But back to the question as to
whether fifteen cents Is too high fol
cotton and whether 1t is possible tc
enforce that price.
The present demand for manufact-
ured goods is greater than 1t has been
in the history Of the cotton industry
and spinners are finding no difficulty
in selling their products at prices thai
would warrant them in paying fifteen
cents for cotton, provided cotton can
not be bought any cheaper.
To say that, under circumstances
like this the producer Of cotton can
not enforce the price Of fifteen cents
Is equivalent to arguing that the pro-
ducer has, and should have, nothing
to do with the matter; but that ne
ought to leave prices to be fixed, as
they have been fixed in the past
through the gambling processes OF the
exchanges.
We do not think it so much matter
of speculation as we do of fundamen-
tai business principle that if the spin
ners can make a profit out Of fifteen
cents cotton and the producers viii
stick together on the proposition thai
no cotton shall be sold for less than
fifteen cents, then fifteen cents will moi
only be the price; but 1t will be fall
price so long as the mills can continue
to pay it with profit to themselves.