New-York tribune., 1910-06-01
DIFFER ON COTTON SLUMP
Big Break Follows Close of May
Deal Without Squeeze.
DENY UNLOADING BY PATTEN
Roundabout Motive Attributed
to Shorts-Good Crop Re-
ports Another Theory.

| There was sensational break in prices
of cotton on the local exchange yesterday.
the declines ranging from 40 TO 20 points,
or 81 to s. 80 a bale the near months being
/ the heaviest losers. The break came short
ly after noon, when delivery ON the May
option, which has been hanging over the
market for months, expired without any
! sign of the expected squeeze"
The closing of the May deal. however.
according to representatives of both the
bulls and the bears, had nothing to do with
the slump in prices. The former said 1t
was desperate effort on the part of the
shorts to prevent further shipments of cot
ton to Europe, it being hoped that by de-
pressing prices here the foreign buyers
would hold off in the expectation of a still
further decline in quotations.
The bears laughed at this explanation of
the break. which they attributed to the
condition estimate of SO4 for the new crop
| by well known private investigator and to
reports from all quarters Of the South that
the present crop gave great promise, hav-
ing been apparently uninjured by the cold
| spell a few weeks ago. when reports of
! heavy crop damage were sent out. They
also attributed the break to heavy selling
! by James A. Patten and his followers, who
were said to have unloaded upward of
5000 bales on the market.
Patterns Brokers Speak.
In contradiction of this report it was
said at the Office of J S. Bache & Co, Mr..
Patteu's brokers, that he was doing moth
| ing but merchandising his cotton and that
he had not bought or sold ten thousand
bales within the last sixty days except for
cash.
1t had been added that all the cotton that
had been delivered to him on Nav con-
| tracts had been sold abroad, ard that with
| in the next twenty or thirty days he would
not have bale of cotton in this country.
Twenty-one thousand bales are being
shipped this week. and more will go as
soon as accommodation can be obtained for
Il on the outgoing steamers. This cotton,
Patter's brokers said was badly wanted
by the mills in the South, and that was
why the shorts who had contracted to de-
liver cotton TO the spinners here were
making all sorts of efforts to prevent it
being shipped to Europe
Representatives of the bears admitted
that Patten was sending a good deal of his
cotton abroad, but they declared that most
of il was being sold consignment and
to spinners and said that his losses on the
shipments after payment of claims for
short weight. difference in grade to that
called for in the contract, freight, etc,
would figure UP to s. bale
Another Struggle Expected.
Whatever the outcome of the cotton ship
ments abroad, it appears to be the general
belief in cotton circles that July will see
another terrific struggle between the bears
and the bull clique. Messrs Patten, Brown,
Haynes and Scales. who successfully nego-
tiated the deal in May which has just been
closed by the delivery to them of the final
consignment of the $4,000 bales for which
they had contracted.
The big Four" as they are known in
the cotton trade, are understood to have
contracted for 10000 bales of July cotton.
and even some of the bears were willing to
admit yesterday that If they stand pat
they will be in position to squeeze" the
shorts as they have seldom been squeezed
before when the time comes for the delivery
OF this cotton.
The decline in the market yesterday was
accompanied by the greatest activity since
the big break of last January. Under the
orders that poured in from virtually all
directions July sold down to 14.tS, "a
points under the closing figures on Friday.
Later in common with the other options,
it recovered some Of its loss, closing at
1440 a net loss of 81 points, s2 so a bale,
for the day. The other active options
closed at from 81 to 60 points lower than on
Friday.
New Orleans, May I-Largely on the
strength of the report that long interests
were disposing of their holdings the cot
ton future market registered a sharp break
to-day, the July and August options falling
! %
bale below the highest prices Of the
morning.
The July and August options dropped un-
til the former was SO points below the
highest OF the day and the latter 80 points
down. Belief that the government reports
next Thursday would be extremely bearish
also was given as a reason for the sudden
decline.