Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1909-12-10

we are condemnng the spurious transactions delivery OF
cotton contemplated.
The merchant has sold let say hundred thousand bales
spinning The price of the cotton was
fixed when he entered into the cotton is to be
according necessities of the spinner The mer
chant must protect himself Therefore he buys contract IRON
else price, the difference between which and his
selling price the spinner fixes his profit less OF course ms
expenses.
contract buys cotton exchange. He might
directly who produce the cotton II the
farmers position to deliver the cotton when ne wans
but they not Therefore there must be some sort OF
place he and buy cotton against the
obligation that he has assumed amount that will protect hn
He therefore to the New York or New orleans
buys those who have to SELL who contract to
supply him with the cotton that he requires and at the times that
He has sold the cotton to the spinner bound deliver
it. avoid the risk of large advance he has gone to
the exchange and bought contract for an equal amount OF
may delivered at the times specified
His the actual delivery of the cotton and he
have this in order to supply the spinner
Such transaction this just legitimate as If ne went
the mule and bought hundred head OF mules Tor
future delivery to enable him to fulfill contracts he has entered
supply farms with mules In other words he has sold
tract for it's delivery which provides delivery of the cotton
protects him against unusual ucuation and fixes his profits
This fair statement though perhaps crude OF the leg-
business and such transaction this what we
when speak of legitimate hedging"
If the merchant cannot hedge when he agrees to supply
spinner large of the fact that he cannot
precudes him entering into such contract with the
then necessarily the market for the sale of cotton limited
destroyed such extent that cannot be handled in
market destroyed price of cotton is to be
depressed and the farmer will be the loser whereas if there is
the merchant protect himself by buying contracts for the
delivery of cotton stand against contracts for the sale OF cotton
which he has made it that the general condition OF
the for the producer for the and for the
merchant.
A merchant who would sell cotton for future delivery and
protect himself ndugng in the widest form of gambling
because he has assumed all of the risk of fucuation and guilty
of speculation in its most hazardous form.
There inherent evil i'll cotton exchange On the con-
rar there inherent good if evil practices not permitted to
Unfortunately exchanges have permitted the
evil of speculation dominate and destroy to large extent the
purpose of their and wild speculation
has taken the place of legitimate business 1t is precisely this e"
which The Journal condemned in its editorial of December and
which condemn earnestly either OF correspond
legitimate field fer exchanges markets. call them
please where they used for the buying
selling commodities whether it be cotton tobacco or
products the usefulness of these organizations
petey submerged if not entirely destroyed by egmate and
spurious methods of speculation which have crep into them
Legitimate hedging against obligations based upon
precisely principle fire insurance and just sound
morals and business because the If there is heavy
price, the hedging contract protects the
seller and in the other if there destructive fire. the hedg
ing contract for insurance protects the owner.