The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1909-11-03
Interesting Features Of the Present
Cotton Market.
BY Atwood Violet.
(Written for the Manufacturers Re-
cord.)

cord)
have had for some time rather de-
cided views upon one feature Of the
cotton market, and now beg to give
expression to them.
In former years. when differences
were even wider than now between
the New York and Liverpool markets,
1t was safe proposition, with lower
grades permitted to be rendered on
contract in New York than in Liver
pool. to sell here and buy simultan-
eously In the foreign market, and
transactions Of this kind brought large
profits to those making a speciality Of
this business. and a number OF firms
In each market did this each season,
to an extreme extent in the aggregate.
The present differences of, say, 40
points between May-June Liverpool
and May at New York. and even with
wider differences lately ruling on
these options. have induced transac-
tions Of this kind Of such volume as
perhaps never before.
One thing. however. has been over
looked. and that Is the character Of
the long interest now and what It has
been In former years Contracts
bought at four or dve cents lower than
present prices are still heing held in
the New York and New Orleans mar
ket. and in great quantity. This is ex-
elusive Of those bought at the same
time and at later period. profits on
which have already been taken to
very considerable extent. and thus
relizing their profits. exclusive Of
those profits unrealized because OF the
contracts still unliquidated. Their DO.
sition, therefore, has been made to q
large extent imprognable, in view of
the demand for American cotton
throughout the world, and that de-
mand In the Southern States Is now
and has been for some time the sus-
taining power of the contract market.
In other words the advance in the
market has been brought about not so
touch through speculative buying of
futures. Is, due greatly to a general
demand all over the world for cotton
of American growth.
The danger. therefore, to those
short In this market is that their sales
have been made to a concentrated and
unusually strong long interest here,
who have probably made. and may
further make, hedge sales In Liver
pool. and thereby dominate the course
OF both markets to such an extent as
to make 1t serious matter for those
who have the opposite side Of the
strsddles As matter OF fact il
gives the leading operators on the Iong
side here an opportunity to multIplJ
their holdings, with little or no ado
tionai risk.
This long interest will probably
bring the corresponding options in the
two markets nearer together, not be-
cause of a desire to do this. but mere
ly because those who sell In this mar
ket Will find 1t a hard proposition to
get the cotton to liquidate the greater
part Of their short interest, whereas
those who sell in the Liverpool mar
ket from this side will be demanding
delivery In their long contracts in the
New York and New Orleans market,
and thus be able to deliver the cotton
against their short contracts in the
Liverpool market. and in the mean
time the position of the foreigner
would be made worse should the diff
ferences narrow instead Of widen.
The short interest. whether it is
here or In Liverpool, or New Orleans,
Is reckoning as Of old upon liquida-
tion by those lory ~ contracts as their
contracts mature. because Of notices
rendered by the seller. but it rather
looks as though the buyer of Octo-
Der and December contracts In this
market will demand delivery of the
cotton. ard these conditions may pre-
vail right straight through the season,
particularly If to some extent they
have hedsed their purchases by sales
i" Liverpool. These hedging sales
there against purchases here would
not be against the total long interest
OF the principal and strongest bulls on
this side. but only to such extent to
protect the bulls against such pur-
chases as they lately felt they had to
make In order to sustain the market
or to prevent raids such as have re-
Gently been attempted several times,
but unsuccessfully. except temporari-