Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1910-09-20

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the cotton they sold during many
months thereafter
Bull campaigns then became more
popular, but not until the spring Of
1909 did the big campaign which re-
suited in 90 cents for August, 1910,
start. 1t appears that under the New
York contract, which has been con-
demned by United States Commission
er of Corporations Herbert Knox
Smith, many unwarranted advantages
are given the short seller of contracts
He may deliver certficated cotton in
such a way as to impose severe hard
ships on the receiver, and because of
this most men who in the past have
worked for higher prices have sold out
their contracts at a decline rather
than take tender cotton which they
could not readily sell. In this way
depressing the price became a prac-
tice and the producer Of cotton and his
natural ally, the speculative bull, were
made the victims.
Last year Messrs. Hayne, Brown and
Scales, who are extensive spot cotton
factors, merchants and exporters, de-
cided to break up this practice at
New York, and in order to succeed ar
ranged to borrow some fifty or more
millions Of dollars from foreign banks
and to supply the needs of many mills
with cotton they expected to receive
on contract. They planned to buy
more cotton than the New York bears
could deliver.
During the fall and winter they
bought many contracts and helped the
market every day. Prices were much
higher than usual when the new crop
market season opened and producers
received from 10 to 13 cents per pound
for all the cotton they sold. In Janua-
ry the New York bears attacked the
market in force, and believing that the
power OF money was supreme, cold
contracts calling for hundreds Of thou
sands of bales which they did not pos
sess Prices declined. In February
the bull leaders got together and PLAN
ned the big coup. They bought all the
contracts offered for sale, and offered
to buy more. This action re-establish-
ed the high prices that had ruled ear
lier in the season. In May, shorts be-
gan to deliver cotton to them. They
paid for and accepted all that was de-
livered. The protective stock held by
the New York bears was wiped out. In
July, shorts had to buy up cotton from
all parts Of the south, from Europe,
and in addition had to borrow a lot
from spinners in order to meet their
obligations to the bull leaders. Mean
while the latter had been shipping out
to unsupplied spinners the cotton so
received as fast as possible.
In August, shorts found they had
cornered themselves. They could not
get cotton enough to fulfill their obli-
cations to the bull leaders. Nobody
had any more to sell them. And so
they bid the market up high enough to
induce the bull leaders to let go some
of the contracts they held. The result
was a 20-cent price, the highest since
1872.
In all, the southern operators who
had gone to New York for the main
purpose OF defeating the professional
price breakers there, received, as stat
ed above, about $4,000 bales of actual
cotton, involving cash outlay OF more
than $50, 200. 900, not counting the mil
lions of dollars of margin money they
had to put up to protect propaply
twice as many future contracts which
they had been carrying. So that
though the profits in the long run seem
large. they must be considered in con-
nection with the enormous money the
operators had at stake during the cam
paign. These men wanted to free the
market from the domination of Wall
street bears, and in effect they created
a market in advance for $4,000 bales
of actual cotton, then bought future
contracts and forced the short sellers
at a severe loss to buy up from the
farmer and the merchant that amount
of cotton and deliver it to them in or
der that they might ship it to the spin
ner who needed it. 1t goes without
saving that the farmer and merchant
who sold the cotton to the speculative
shorts obtained very high prices for it..
The fact that some actual cotton
merchants possessed the nerve and the
means to have taken up so much cot
ton on contract has completely sub
dued those New Workers who have
made a practice of beating down the
price of cotton. In the past the spin
ner has depended on these bears to put
prices down whenever the spinner
needed cotton.
Henceforth the New York bear will
fear to attempt a repetition of his old
time programme, consequently the
spinner will pay the value of cotton
to secure 1t.
The 1909 crop brought the southern
farmers somewhere about $SOO,OOO,OOO
in cash. There is now every reason to
hope that the 1910 crop will bring the
producer even more than that. The
bull leaders say prices will continue
high, and should a sharp decline occur
at any time they will probably step in
and repeat their successful tactics OF
recent months. Under such circum-
stances the southern farmer will not
be apt to sacrifice his 1910 yield.