New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-11-20
U.S.LED POWERS
TO BOOM COTTON
AS SECRET RIVALS
Germany and Britain Bid
Against Each Other
Didn't Know 1t.
DIFFERENT END
SOUGHT BY EACH
Buyers Profit by Their Pur.
chases, and This Country Is
Saved from War Loss.
From The Tribune Buresu.l

From Ths Tribune Buresul
Washington, Nov. 19.-The British
and German governments, with entirely
different intentions. have bid against
each other for cotton, bought nearly
a million and a quarter of bales,
forced the recent spectacular advance
of fogr cents, and protected American
interests from loss as result Of the
war, it was learned by The Tribune to-
day on unquestionable authority.
Incidentally, the British government
had agreed with the Federal Reserve
Board to support the cotton market be-
fore announcement was made of the
placing of cotton on the absolute con-
traband list. This assurance was
known TO Secretary of the Treasury
McAdoo several days before he made
his remarkable announcement that he
would deposit s30,000.000 of United
States Treasury funds in the three
Southern reserve banks for loans on
cotton at low rate of interest.
Prior to this, and afterward, the Re
serve Board bent every energy to in
duce the Southern planters to hold
their cotton for better prices. having
the absolute knowledge that Great
Britain would support the market il
the contraband declaration tended to
force it down, and believing that the
German government also would pur-
chase cotton.
Germany Helped Britain.
The motives of the two governments
in buying cotton we're curiously differ
ent, and In making the purchases the
German government not only played
into the hands Of the cotton growers
and the Reserve Board, but helped 70
accomplish the end of the British gov
ernment. This was merely to support
the cotton market and to avoid anger
ing the Southern states and thus cause
n pressure for an embargo on arms as
retaliation for the interference with
trade.
Arrangements were made by the
British government 10 support the cot
ton market before the contraband
declaration. The British were extreme
ly anxious TO make cotton contraband
TO prevent it from reaching Germany,
but they were just as anxious not to
stir I'D antagonism which would result
in a fight in Congress by Southern Sen
ators and Representatives for an en-
barge. Representatives Of the British
government. on the advice OF members
OF the Federal Reserve Board, adopted
the plan of supporting the market A
telegram was sent TO Secretary Nc
Adoo, then in Maine, and the whole
plan was later thrashed out with
President Wilson, who approved it,,
The English were advised by the Re
serve Board to support the cotton mar
ket. not in New York, where their pur-
chases would have to be tremendous In
volume to have a moral effect, but IN
liverpool and New Orleans. The ad-
vice of the Reserve Board was taken
not only on this but also in the actual
wording of the embargo declaration,
and on the time at which it was made
public.
This was on a Saturday afternoon,
after the market closed. When the
IL
Monday morning brokers representing
the British government bought all cot
ton offered at the closing prices OF Sat
urday and forced the price up just a
little.
This all happening before daylight
had reached New York. the New York
cotton brokers discovered before begin
ming their trading that, instead Of cot
ton going down on the contraband
declaration. it had actually gone up,
and so they were not inclined to be so
bearish.
New Orleans Market Rises.
An hour after the New York market
had opened reports from New Orleans
began TO come in, showing strong sup
port of the market, as brokers repre-
senting the British government also
were making such purchases there as
were necessary 70 drive the price up a
New Orleans is not af important cot
ton market from the point of view Of
size of transactions, but it is very i'm
portant from sentimental viewpoint,
as it is taken BY New York cotton
spectators TO reflect the attitude of
the South. SO this upward movement
in New Orleans had distinctly bullish
effect on the New York market.
The British representatives had been
advised by the members OF the Reserve
Board to put the price up two cents a
pound. II was then eight cents and
slightly below that figure in some parts
of the South. After the movement be-
gan it did not stop at eight cents, but
climbed TO l2, TO the great astonish-
ment of the British, who had to buy
total Of only 27b,00O bales during the
entire movement. The reason for TINS
was that under the direction OF
Geheimrat Albert, who has come INTO
view through the investigation OF the
German propaganda, the Germans pc
gan buying cotton as soon as lhey ue
tected the advance in price.
Consultation between one OF tne
members of the Reserve Board ana Dr'
Albert had caused this, the Reserve
Board member utilizing the German oe-
lief that the war would De over IN
January TO bring about the result.
DR. Albert stated, according to in
formation received By The Tribune to-
dav that it was lis intention 10 work
soy some plan BY which England would
no forced 10 permit the expectation OF
a large quantity of cotton from the
limited States 20 Germany. lie stated
his belief thai the war would be over
ANYHOW in January, and that Germany
wished then to be in a position to re-
cou.,nxA on v.1. :, columns