Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1910-07-21

| of refutation. The men here today
| who are looking into the future of the
cotton trade, however. are disposed to
| note two important facts. One is that
| manufacturers of all kinds are coming
less and less to hedge" against their
| own necessities in the market where
the spectators in the future options
SO kindly wait to accommodate them,
| and the second is that other .commodi-
ties and other crops demonstrate that
| the legitimate needs of trade can be
| taken care of without "hedging' at ALL
| In other words, the Spectator who
| claims that his reason of being is to
| furnish the manufacturer chance, if
| he thinks there is to be short crop,
to buy in the winter or spring the cot
ton which he is going to need in July.
or to sell against his future require
ments it, he believes the crop will be
(abnndaDt and prices low. is in process
Of being robbed of his badge of respec-
liability.
| The, reason is not far to seek. The
| course Of the cotton market in the last
six months-going no further back-is
sufficient to demonstrate why a manu-
| facturer. unless he wants to become a
| Spectator out and out or has unlimit-
| ed capital. has no business meddling
| in the futures market in either New
York or New Orleans. The Patten pool
| itself is the best illustration why this
is so. That aggregation. by means Of
| an ingeriouslt worded contract which
gave them the appearance of be-
ing engaged in an effort to keep
the 1910 crop away from the wick
ed spectators on the New York.
New Orleans and Liverpool ex-
changes. actually undertook to cor
ner a large part of a crop that was
scheduled to be an unduly short one
anyway. and thereby to reap their
| profits at the expense of the orderly
procedure of the entire cotton trade
The far-reaching effect of this opera
| ton was what moved the Government
to try in it's criminal prosecution to
stretch the Sherman act into covering
any contract which affects commo-
| dity so generally used that it is vital
to the well being of the country, and
thus necessarily enters into interstate
trade.
Effect Of Such Pool.
But whatever one may think of this
| legal theory the fact remains necessar-
| lily bad. and any manufacturer. large
or small-unless he is ready to throw
intO the scales his entire fortune pro-
tectng his position in case pinch
Cnmes-is taking serious chances if he
trades in the futures market while the
pool is in operation. The only safe
position for such manufactures to
| flake would be to surround himself with
more capital than the combination of
| the most daring and powerful opera
| tors in the country have been able to
accumulate for their mutual gamble,
| and that. obviously. is out of the ques-
| ton So the manufacturer has the
choice either of turning Spectator. or
else OF protecting~his interests outside
| the cotton pit. which many of them
are doing. Indeed it is not an infre-
quent occurrence among the cotton
goods people to raise warning signals
against a Observation-Disclosures or job
Der who is known to be monkeying
with the cotton market. For il he
stays out. he is up against the single
! chance. of the crop itself; whereas, if
he goes in. he has to match his wits
against the uncertainties of the actual
crop and as well against all the conjec-
guessing on the crop with him.
AS proof that the underwriting"
feature of cotton futures speculation is
not an essential to the trade, even if
the extreme disturbances were avoided,
the more conservative men down town
point to the fact that the business of
cotton NEUTRALITY-SUSPICIOUS. up one
step in the order of evolutiop-does not
H.
| change even though it involves at
| least three times the outlay for raw
material. labor and supplies. that the
! cotton goods business requires. 1t is
said to be a fact. although not gener-
ally appreciated. that the egg crop is
the most valuable crop in the United
States today: yet this requires no ''un-
iderwriting' by spectators. And if the