The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1908-08-19


specu 'ator, In fact, it is only within
the last two years that 1 have given
attention to that form OF speculation
My first big profits were made in the
panic Of last year. In December, 1906
l became convinced that the tremen-
dous over speculation and over ex-
tension in all forms Of business were
bound to result in disastrous liquida-
tion. I was pretty comfortably fixed
at that time, and I put out a large
short line Of Union Pacific, Reading,
Copper and Smelters.
| "As prices melted from the high lev
els increased my commitments until
on March IA. had thousands of
shares OF short contracts out. When
the crash came that day I covered
every contract and. on May 8. follow
Ing Mrs. Livermore and myself sailed
for g. long vacation abroad.
had planned to stay away for six
months. Early in August, however,
the cotton situation in Liverpool at
tracted my attention. Despite the
growing business depression, the high
price Of money, the curtailment of
credit everywhere and the great un-
easiness that existed In Europe as to
our finances, coupled with the abun-
dant crop OF cotton promised by the
forecasts, cotton In New York was SELL
ing ut 12.05c a pound. I cancelled all
my European engagements and sailed
for home. arriving in New York on
August 21st.
THE price had advanced to 12.6Oc
and at this level put out my short
lines. found the market in a very
unstable condition. so heavily over
sold that 1t could not take my offer
ings. l followed it down to ten cents
pound and then, finding everybody
had gone short, covered 100000 bales
at prices ranging from $50 to 1O.4O.
This was my first big coup, and it
was simply the result Of a common
sense view OF the situation.
Since that time have been in and
out or the market many times. al
though l have left 1t alone for weeks
at time. Early this spring I found
the cotton situation again very at
tractive. Futures were selling at
8 Ia cents pound and very much
the same conditions existed in that
staple as those which manifesto &
themselves in the stock market last
February.
II had been on a vacation down
south and when came back found
everybody extremely bearish. The
mills were running on half time; there
was very little demand for cotton In
Europe; the textile trade was stag
nant, and business generally was de-
pressed. There had been, however, a
long period Of liquidation. found
that the trade was practically sold out
OF cotton. Supplies were exhausted
and every business man was afraid to
buy anything because OF the general
gloom In financial affairs. The pen.
dulum had swung to its lowest
point.
Suddenly one firm began to buy
moderately; the other houses, know
inG that. In order to compete, they
must acquire their raw material at
equal levels. began putting in their or
ders. Demand suddenly sprang up
everywhere. Copper has been ad-
vancing an eighth OF q cent a pound
day. the market flooded with or
ders and the copper stocks are soar
ing. The textile trade has begun to
improve. The mills must soon begin
to lay in their suppliea Bye and bye
one fellow will begin buying just a
little. then the others will follow. A
tremendous revival in the industry
Is inevitable.
Meantime the cotton shorts have
sold thousands Of bales which they do
not own and cannot deliver. They
have reckoned on the new crop. but
they have not reckoned on the new
planter In the south. He has finally
learned his lesson. He Is in a position
to demand his own price. The Far
mers' union has taken an oath not to
sell bale Of cotton less than ten
cents a pound at the primary market.
The spinners must buy the New York
options to hedge against their purchas-
es In the south.
| 'The spectators must so south to
buy their cotton for New York deli
veries at a cost of 81 to SIS a bale more
than the prevailing New York price
/ That ia tho situation toIo,, oua q. t