Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1912-02-02
THE COTTON MARKET.

Cotton selling at 10 cents in the To-
cal markets Wednesday with January
futures selling in the New York mar
ket at 9.57 was rather unusual stu
alton that excites inquiry which calls
for explanation.
In the first place, 1t may be of in
terest to state that the 10 cents fea-
ture of the situation was not local.
Ten cents was being paid freely from
South Carolina to Texas-certainly at
many points In Texas.
Ask the average cotton man what
the trouble was and he will tell you
"squeeZe-short sellers unable to de-
liver" and that tells the story; but
not plainly enough to be understood
by the average cotton seller who, as
a rule, concerns himself only with the
price rather than the reason therefor.
But squeeze" is about the right
word-only 1t will be we'll to distin-
guish the squeeze In this case from an
ordinary cotton exchange corner. 1t
Is not that situation; but rather sit
uation that Is legitimate, involving the
cotton exchange only In its legitimate
functions.
During the past few years there has
grown up an increasing number Of To-
cal cotton dealers who go in on their
own account to sell mills cotton for
future delivery-sO many bales a
month for so many months. Say a
dealer agrees to sell a mill 100 bales
a month for six months. The contract
Is based on New York Cotton Ex-
change quotations and the sale Is usu-
ally made at so many points in New
York quotations. Sixty points on New
York Is considered fair basis for the
httf hof 10 81 n1QtfQr
of agreement on the part Of the par
ties to the contract and sometimes
dealers agree to sell at thirty points
advance on New York. AS common
thing, in six months contracts, the
middle month price Is adopted as a
basis of the whole transaction.
OF course 1t Is understood that when
the trade Is made the seller may or
may not have on hand bale Of cotton
available for delivery. He goes into
the deal with the expectation OF buy
ing what he wants In the meantime
and being ready to ship the cotton as
desired, and hoping, of course. to make
a good profit. But as a precaut!on
against loss very often when he sells
to the mill, he hedges by buying fu-
lures on the New York market. He
thus keeps in pretty close to the shore
and ordinarily does not StdHu W lose
very heavily. But in the present case
the farmers have not been quite so
ready to sell on a basis Of New York
futures as they have sometimes been,
and when January began to draw to
close before the supplies for that
month had been gathered In, the buy
ers had to get busy and go up on the
price. With January futures selling at
only 9.57. therefore the man who had
a contract of only thirty points on
January. had some loss, where he had
to pay 10 cents.
IT is a fact that spot cotton dealers
made big money out Of this arrange
ment last year. Many cleared 50 or
81 a bale on their contracts. In view
of the acknowledged big crop this
wear, the proposition looked better
than ever. and the common belief Is
that more cotton has been sold that
way than usual But because New
York has not been responding quite
promptly enough. the pinch has been
very uncomfortable to many.
As to what the outcome Is going to
be. there Is no telling-no more than
usual. From the standpoint Of the