The sun., 1918-09-06
PRICE FIXING PLANS"
CUT COTTON PRICES
Market for Future Contracts
Drops From 10 to 1872
Net Points. ~
U. S. CONTROL OPPOSED
w. l.. johnson Believes 1t
Would Be Mistake for Gov
eminent to Regulate Rates.

eminent to Regulate Rates.
Great excitement and a severe break
IN the cotton market were caused yester-
DAY by the announcement of Bernard
M. Baruch. chairman Of the War In
dustries Board, that committee would
be appointed to determine whether con-
troll OF distribution and stabil.zing of
prices were necessary. Liquidation was
general, with prices declining 80 rapidly
mat many stop orders were uncovered on
the break, which extended to 3205 cents
Tor December contracts or 2s5 points
below the closing price Of Wednesday.
ana approximately AZ cents a pound,
or $3.50 bale. under the high records
OF last Tuesday. Rallies followed to-
ward the close although the market re-
NAMED nervous and unsettled, with the
close barely steady at a net decline of
ITO to 1872 points. Nevertheless the con-
sensus of opinion in the cotton trade
was that price fixing Is unnecessary and
that the situation would care for itself
without recourse to Government action.
The views OF the cottori traders were
summed up by w. L. johnson. president
OF the New York Cotton Exchange who
said: ut will be some time probably
before any committee that is to be APP
pointed will be able to make any
recommendations, and believe that the
outturn OF the crop and prevailing prices
AT that time will be important factors in
determining whether the price Of cotton
shall be regulated or not
III definite price for all sales Of cot
ton should be fixed there would be no
further useful purpose TO be served by
The future contract market. but believe
II would be mistake for the Govern
ment to take such a course, and do not
think that such action will be taken"
Exchange Members Optimistic.
1t was natural for the members of the
exchange tosview with some measure of
anxiety the formation OF a price fixing
committee. but they all expressed the
belief that the Government would handle
the matter not only to. the best interests
OF the country. but with fairness to the
trade. The outturn of the crop will not
be known definitely for six weeks or
thereabout, and few interests expect
that any action will be taken before that
period has elapsed.
Price fixing Is not wanted by the
planter in the South" declared one mem
Der. unless the price Is placed high
enough to care for all contingencies.
Some connect the action by the War In
dustrtes Board with the countrywide in
vestigetion started several weeks ago by
the Department Of Agriculture and still
unfinished. but / believe that the COM
mittees will act Independently.
ut must not be forgotten that the fu-
ture contract business performs legiti-
mate service by giving protection to the
man who buys cotton from the planters
10 the intermediate handler and TO the
mill manufacturer These three inter-
eets through the use of hedging can pro-
tect themselves against loss in case of
price fiuctuatlon. and I for one should
welcome the continuance OF business in
future contracts. Few interests have
forgotten the experience when the cotton
exchanges were closed for two months
following the outbreak OF war and when
the buy a bale Of cotton movement was
inaugurated to save the planter from
ruin. The adoption of price fixing would
be an artificial measure which has
worked fairly we'll In the case Of wheat
but which might be inimical to the best
interests Of the country in the case Of
cotton"
Maximum and Minimu m Prices,
II was au6etSttu Yesterday tnat the
Government might establish a maximum
and minimum price limit for cotton. con-
tinuing the future contract business
within those limits. The Government
seems to have its hands full in paying
cash for wheat on its arrival at termi-
mails. Withdrawing as 1t does large
amounts of cash from the East to handle
the crop movement, according to another
member. who called attention to the
fart that n the no
cotton crop the financial demands would
be enormous with present prices In ex-
cess OF 80 cents a pound
The break in prices did not neces-
sarily imply any general belief that
such ami investigation as that proposed
would result In the fixing of materially
lower values but the announcement had
an unsettling effect on sentiment which
inspired a more or less general dispo-
sition to even UP commitments Com
ing after such prolonged and extensive
advances as have occurred in the market
during the past month this naturally
took the form of urgent liquidation. AS
the decline extended the selling natu.
rally became more excited and urgent
and after opening weak at a decline OF
81 TO 100 points active months sold 222
10 235 points under Wednesdays prices
Offerings then subsidized and there were
rallies on covering and buying believed
TO be for Japanese account. Closing
prices we're within 8 or 10 points OF
the best point reached on the recovery.
Further rains were reported in the
Southwest and more optimistic view
has developed rs TO their possible effect
on the final yield. depending upon the
frost date and future weather conditions.
There might have been some selling on
this respect even had there been no an
nouncement from Washington, and there
al
Mt the start. The selling of the latter
sort was shut out by the rapidity of
the decline. as II was mostly on limited
orders, however, and was little in evil |
dence during the afternoon s.- '
Range Of prices wadn...
opeh' hlgh. Low. Close. day |
SSep.emoef''' 49, 80: 49,. 33.75B 35W 1
SSctooe.. .''' "'o $40 $50 3375-s0 $50 |
NoVeinoer''' -. -. -. 80. 33B A5s |
Iesmer"' as 20 $40 ZOO 38B-5 $40
yhhuaIy'''' Szo $3.50 500 30SB As
February. ..,.. 900. -. AZ 0op a o.
March. ..... 3J.10 3345 3leB "a 00oa - ~
April. ....... .... -. ~ oon go