Tensas gazette. [volume] (St. Joseph, La.) 1886-current, 1913-08-08
ANTI.cOTToN FUTURE HESITATION.
New York City, July 80, 1918.
Mr.. w. NJ. Davidson,

lHVctcStcu III tllls suDJcct dS We are, w
ask that you do us the courtesy of care
fully reading the following (which w
will make as brief as possible in our ef
fort to cover the subject, and after yoU
have read the letter we trust you will fine
it consistent to lend your aid in opposing
the Clarke Amendment to the Tariff Bill
The Clarke Amendment imposes tax
OF 1-l0th Of cent a pound on all cotton
future contracts. This is equivalent tc
so cents per bale or 5000 per contract
of 100 bales, which is prohibitive, would
destroy the functions of the New York
and New Orleans Cotton Exchanges and
practically close them and transfer the
making OF cotton market to foreign
countries, where two-thirds of America {
cotton crop is consumed, and the price
of our staple would be made at Liverpool,
England, and Bremen, Germany.
The Clarke Amendment prohibits hedg-
ing or placing cotton future orders even
in foreign markets without the tax OF
$500 per contract, leaving the Ameri-
cans at that much of disadvantage I'M
der their foreign competitors.
Many people throughout the South
who understand what a hardship the
passage of such a law would mean on
! the South and its greatest industry, have
protested to the Senators of their respect
i've States in Washington, also to Senator
F. M. Simmons of North Carolina, who
is Chairman of the Senate Finance Com
mittee, and to Hon. Oscar w. Under
wood of Alabama, who is Chairman of
the House Ways and Means Committee,
asking them to use their influence against
the Clarke Amendment; but there are
some who decline to enter protest,
and we have seen kilograms and letters
from mills stating that they would not
protest, because if the Clarke Amend
ment went through they felt they could
buy their cotton cheaper than under the
present system of competition. This shows
where the benefit would be derived by
present proposed legislation.
We have been advised that protests
against the Clarke Amendment going
I, from merchants, bankers, cotton mer-
chants, cotton factors, exporters, etc.
who use the market most extensively as
an insurance medium and a protection
in their business, were of little or no eff
feet, and that the voice of the farmer
is needed in this instance.
Our honorable Senators and Repre-
sentatives in Washington should realize
that the cotton markets and cotton ex-
changes are not used as rule for hedg-
ing by the planter except where he is a
very large producer, but the market
quotations through the exchanges afford
basis of price from hour to hour and
day to day, which is benefit for the
small as well as the large producer alike,
and without this basis of price the small
farmer could not sell respectively his
three, five, ten or twenty bales of cotton
except at the arbitrary price Of the local
buyer in the small town or large city.
The planter who raises the small num-
Der of bales each year has no need for a
market except for him to gauge the value
of his staple and to help him know what
the general price is over the country, and
what his neighbors are selling for and
what the value Of his own production is
at the time. But the cotton exchanges
of America have their very valuable func-
tons and play an important part as a
basis of protection and insurance to those
who are buying the few number of bales
from each farmer, until the aggregate of
the days purchases, in busy season,
will reach 100 or 500 or probably 1000
bales.
The small merchant, the cotton buyer
or the exporter who accumulates his cot
ton in this way is able to sell contracts on
the New York or New Orleans exchange
against his holdings Of spot cotton until
he is able to effect sale, either to the
American spinner who uses on an aver
age about one-third OF our crop or to
the foreign spinner who uses about two
thirds of the American crop.
If this local cotton merchant or factor
could not protect himself by hedges
against spot cotton which he is buying,
when he did not have an order for that
cotton, he would be obliged to offer lower
prices to the farmer than he could afford
to pay when he knows he can get effect
i've insurance against loss by hedging
with contracts.
The same thing applies to the mill man
who makes contracts ahead for the out.
put of his mill. He sells bill of good:
here and another bill elsewhere; he has
not got the cotton to fill these orders but
insures himself by buying contracts on
the different exchanges until he can Sc
cure the grades of cotton necessary with
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