The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-08-04

Fer western Terra fsir ee-dey, s.oept
thunder ehowcru IN extreme we~, portion;
fair to- morrow
For Oklahoma generally fair. continued
warm to-day and tomorrow.
For Arkansae. local thunder ehowers to-
days warmer in central ana east portions;
fair and warm Tomorrow.
There was almost as much excitement
In cotton circles yesterday as II the ex-
change had been open Tho crisis through
which the trade Is passing was evidenced
by the fnot that the board of managers
decided after prolonged session, to close
| tho Cotton Exchange indefinitely, Tho no.
tico carried with Il tho proviso that tho
exchange could resume business on TWEEN
ty-four hours ncttca
| This action was taken after cables
which announced that tho directors Of thu
Liverpool Cotton Association had resolved
TO close that exchange indefinitely had
| been received A resolution also was
psASod by Liverpool declaring that until
further notice ali trading In futures
and all tenders in settlement for future
contracts should be suspended, and that
until arrangements 20 safeguard the gen.
eral interests should be made no trading
In spot cotton would be permitted. Simi-
lar action was taken by the New Orleans
| Cotton Exchange
| No better evidence of the extreme ton
sion under which the cotton trade has been
laboring for the past week could be given
than the universal whoop OF Joy that fol-
lowed the announcement yesterday after
noon that the clearing house sheet had
gene through and all margin calls had
been alphabetically met throughout the
street. II was taken for granted that the
members OF the exchange who passed
through such crises as the Sully failure
and the tremendous slump following the
NJ
tho present storm In the usual fashion
There was considerable underlying anxi-
ETY.. however. and this was not removed
until the Official announcement was made.
The consequences of the failure OF s. II
=. Pell & Co. continued TO remain upper
most as topics of interest In the local
trade. No statement OF assets and l,ablli-
ties has been issued by Price and Wyckorr.
the assignees of tho suspended Arm. who
| were appointed last Friday. The prin-
| clpal development of the day was the
filing OF an involuntary petition in
bankruptcy in the Omitted States District
Court against Stephen H. =. Pen. Charles
A. Kttle and Howard II. Pell. individually
and as copartners In the firm of S. II. p.
Pell Co. David II. Miller, attorney for
| the creditors, made an application 10
Judge Grubb in the United States Dis
trict Court for a reoeivership for the
firm.
iHiS dctiOH WIS decided upon at an In
| formal meeting OF tho creditors at the
Offices OF Gwathmey & Co, at which
the following committee was appointed to
| assist In the settlement OF the FIRMS
affairs. Arthur Lehman, s. r Hubbard.
70, *. Cone, George Post. Henry Schaefer,
Marshall Geer and A. b. Gvvathmcy Jr.
Although no official statement has been
made regarding the commitments OF Pell
a Co, some guesses as 10 their outstand-
| Ing contracts are being made in we'll In
formed circles. One estimate places the
amount of long contracts at 2Os. 900 bales
but another estimate OF $4,000 was be-
lieved 10 b. nearer the mark The ex-
change was open on Friday only twenty
five minutes after the suspension was an
nounced. and It Is impossible 20 tell how
many OF the Pell contracts were sold out
by other firms in order to get new names
Some estimates place this liquidation at
$4,000 bales. but this is believed 10
be high. The remaining contracts would
have to be sold out in approximately
two and one-half hours OF trading under
the Cotton Exchange rules unless some
extraordinary means are adopted to take
care OF these commitments otherwise.
In addition 10 the problem Of liqui-
dating tho remainder OF me Pell con-
tracts arises a situation resulting from
the interrelation Of tho New York and
! Liverpool markets. Enormous straddls
operations have been carried on between
New York and Liverpool and the sales
have been made largely In New York
against purchases in Liverpool. Event
ually this should prove to DO a leverage
FOR the lifting OF prices here but every
| thing depends on when these straddles
are closed out. A gigantic operation
has been conducted in Liverpool by two
big spot firms with the afiilation of cor
tain other concerns. This deal involved
| the taking up OF cotton on the July
August option In Liverpool. Those who
were running the deal probably expected
| to bring about severe contract squeeze
| but they were unexpectedly swannped
with deliveries. The total tenders are
| believed to have amounted TO abou,
| 10000 bales. This cotton, In the event
Of stoppage of export business should
prove very valuable and what prom sed
to be loss OF $1,000. 900 or so might
| easily turn into q profit of several mill
ions. This depends altogether on where
tho hedges of this cotton are placed. II
| tho holdings OF spots have been sold
against In New York the transaction
should prove enormously profitable. Blu,
II the hedge sales have been placed in
Liverpool the margin calls on short con-
tracts might be impossible TO finance a,
this time.
The cotton situation in this country ia
almost chaotic The withdrawal OF ex-
port demand owing to fears OF seaz,ire
in spite OF the fact that cotton is not a
contraband of war. and the high marine
insurance together with tho difriculty of
paying for the cotton may result IN
throwing the burden entirely upon buyers
for American mills and Japan II Is be-
leved that under such conditions cotton
might go very low. This, however, In
wolves the supposition that the South will
part with It's cotton dn panic stricken
fashion. II the South holds, as II is
we'll able to do thero should be no de-
moralization and cotton can be marketed
| gradually without throwing an excess
sive burden on the future markets In the
way of hedge sales.
| II England, In the event Of Joining in
the war should Immediately demonstrates
her naval supremacy and either annIhi-
late or bottle up tho German warcraft
a fair amount OF cotton would be going
forth to Europe, which could gradually
relieve the strain.
There Is a better feeling regarding the
local financial situation 80 far as tho
cotton trade Is concerned. Margin calls
on customers have met with unusually
good responses and there Is no talk of
any further trouble. At the meeting of
the board OF managers yesterday a COM
l IL