The Montgomery advertiser., 1908-09-27

conclusive the popular price estimate. because such estimate carries within
 itself the germs of its own undofng. The more nearly unanimous the esti- mate. the more certain is the contra diction. The more obvious the reason why prices should go one way, the more certain 1t is that they will event. ually go the other way. This phenom- enon is not due to the caprice of chance. but to the law of cause and effect. If the great majority of peo- pie believe that there is money to be | made by selling any commodity or | thing, they will in the aggregate sell more of that commodity or thing than | can be procured or more than exists. As certainly as the sun will rise, 1t Is certain that the time will come when | this same majority will become hidders against each other just as they had been competitive sellers. On the other I hand, if the great majority of people believe that money Is to be made by buying a commodity or thing. they | will in the aggregate buy more of that | commodity or thing than there is any | market for, or more than they can possibly dispose of: and with equal certainty as in the other case. these | buyers will at about the same time
 try to sell out in competition with | each other, just as they had been com petitive buyers. The more pronounced
 and general the disposition either way, | the more considerable and violent will | be the reaction. The harder ball is | thrown against a wall the stronger | will be the rebound.
 Promising to the Producer. If we apply this reasoning to the price problem of the coming crop, we VIII reach a conclusion most promis- | ing to the producer of cotton. We
 believe that there exists at this time a l condition of actural physical fact and | psych ological factor, both or either | of which may bring about an advance
 in prices, depending upon whether the
 producer of cotton shall take advan- I tage of these conditions or throw them away in an excess of fear or stub | bornness.
 The conditions upon which we base I our belief are these: The consensus of opinion arrived early at the conclu-
 sion that this crop would be the great est eyer made. Up to the very recent past it was almost unanimously be- lieved that 14,00O, ,000-bale crop was probable, and there are many who still believe it. This great promise was industriously advertised both at home and abroad, and was largely accepted by those who wanted low prices and reluctantly admitted by those who would be hurt thereby. Trade con-
 
 demoralization came from spinners I and dry goods centers, and few if any held out promise for the future. Such a state of facts believed there could | be but one conclusion, and that was | that the price of cotton must go down. The vast majority of people did believe these facts, and almost everybody who expected to make money on cotton
 were convinced that they must make 1t by selling. And they did sell There can be no doubt but that there is
 large short interest in the market, not | only active. but negative. The active | short interest Is represented by the contracts for delivery and he negative short interest by the needs of those
 who must have cotton. but who. under the prevailing impression that prices l must go lower, have failed to provide themselves either with cotton or con- | tracts therefor. This oversold and un- derbought condition of the market has l been aggravated by the very hap
 penings that should have amellorated | 1t. We refer to the reports of deteri-
 oration and other happenings which have momentariIy given strength to
 the market. Instead of causing sell
 CTS to cover, these developments have
 induced them. and given them oppor-
 tunities to sell more and to commit
 themselves more deeply to the convic-
 
 mendous crop begins in earnest, low
 CT prices must prevail. The mind Is
 open so long as 1t Is seeking a con- clusion. but when it has once reached conclusion and committed itself
 thereto, 1t ceases to be open and be- comes partisan. Facts which before
 the decision would have been given
 consideration and weight are after the
 decision belittled. brushed aside and
 denied. Thus the consensus of opinion
 having committed itself to the belief
 that prices must continue to decline. has not only discredited those facts | which contradicted the grounds of it's belief. but has welcomed each tendency
 toward reaction as an opportunity to commit itself more heavily to its be- | lief and to stake more heavily upon I>the issue. And thus will the consen- | sus of opinion continue to act until re- | versal shall come through some shock. l and the majority will then execute | quick about-face and the consensus of opinion will then be that somebody Is l In a hole.
 The Awakening.
 This shock or awakening may come | in one or two ways. The consensus
 of opinion as to prices. based upon the
 assumption of a record crop for size
 and record trade conditions for de-
 pression. may find itself mistaken in
 one or both particulars. Or 1t may
 be reasonably correct in these assump- | tions. and yet the producer by market l ing his cotton gradually and not in an overwhelming flood. may upset the l calculation of the majority as to move-
 ment and prove that. although correct 1 in its estimate of conditions 1t Is wrong