The Mena weekly star., 1911-10-26
Judge J. M. Carter on the Present
 Cotton Situation
TeXarkana Jurist Gives Reasons Why Prices Are so Low, and
 His Remedy.

kama discussed the causes which, Ill his opinion, are responsible for the low prices of cotton, conclud- fEg his practical talk by suggesting remedy in the nature of law prohibiting dealing in futures and pledging himself to advocate the enactment of such a measure by congress if sent to that body by the people of the Fourth district of Arkansas.
 In his Mulberry speech, Judge Carter said:
 Thirty days ago 1t was claimed by the spinners themselves that the cotton trade of the world could we'll afford to take fourteen mil- lion bale crop of American cotton at twelve cents per pound and make good profit in it's manufac- ture. Since that time, notwith- standing the government estimate of less than a thirteen million bale crop, the price has fallen from fif- teen cents per pound to nine cents.
 What is the matter with the
 market? That is a question most vitally touching every farmer in the South, as well as the Souths
 material progress along all lines. Every village, town and city in the cotton belt now has from one to scores of cotton buyers. 1 have no complaint to make against the cot ton buyers. They had as soon pay us fifteen cents for our cotton as nine cents, and they would make
 just as much money paying fifteen cents as they make when they pay but nine cents. It is not their fault, but 1t is the fault of the system of business which has been permitted
 to grow up. Many of these buyers have but little money; in fact, not one out of twenty has money enough to pay for the cotton he
 buys today. The system is this: Say he has five hundred or thous- and dollars. He arranges with some bank in his town or nearby to furnish him the money to pay for the cotton. He deposits five hundred dollars with the bank as his margin on which to do busi- ness. The bank agrees, as the pur- chaser buys cotton, to advance him the money to pay for it just as long as the market value of the cotton, together with his five hun- dred dollars margin equals or ex- ceeds the amount of money ad- vanced or loaned him. The buyer as security to the bank for the money loaned, turns over to it his weighing or warehouse receipts for the cotton as fast as it's money is advanced; in fact, many buyers simply o. K the weighing or warehouse receipt and tell the sell CT to take it to the bank and get his money.
 The bank will not take any chances with the buyer, and should not, in getting this money back. So, if the market should weaken or become lower, the buyer is forced to put up more money with his bank as margin or immediately sell his cotton and pay the bank what he owes. If the buyer fails to do this, then the bank, under the agreement arranged at the be- ginning, sells this cotton at the market price, and out of the pro- ceeds pays itself what the buyer owes it and turns over the remain der, if any, to him.
 Under this system the buyer may have lost all his cotton and the five hundred dollars originally put up with the bank as margin
 The bank has done right, because if it had not followed that method Il would have sustained the loss in
 the decline of the market, and the next step W uld have been bank failure.
 Now, to avoid being closed out
 in this way, and thereby lose both
 his cotton and his margin, the system has forced the buyers to
 sell today the cotton he may buy
 tomorrow. And this is where all
 our troubles begin.
 The buyer now begins to offer
 over the telegraph wires to tine eastern spinners at a certain stated
 price as much cotton of a given
 grade as he thinks he can buy to- morrow. His offer IS accepted by
 wire tonight or tomorrow morning
 before the market opens. The buy
 CT then goes upon the street and
 begins to hammer the price in or
 der to enable him to buy enough
 cotton to fill his order or sale he
 made last night two thousand miles
 away, at such a reduced price as
 will enable him to make profit
 in the transaction. The result is
 that the entire actual consumers
 market, the spinners, is over
 whelmed each day with offers to
 sell cotton, and having received SC
 many offers to sell, they naturally
 conclude that the country is over flowing with cotton that there is
 Inc market for, and they offer less
 and less for the cotton as long as
 they can buy it. That, in my judg-
 ment, is the cause of our present
 low prices. And you and are the
 men who are more than any others
 getting hurt by it. Examine the
 report of the cotton market today ! ashou if ig rnada mn and x-a,, x,.fll