The news scimitar. (Memphis, Tenn.) 1907-1926, 1918-11-15
SITUATION IN COTTON

Conditions in the cotton market have arisen which require
the exercise Of some hard common sense ii the South is to avoid
the loss of 4 lot OF money.
Prices have declined rapidly during the past two weeks.
especially since peace was made sure by the German acceptance
Of the armisuce terms. The elements in the market which, by
some peculiar species Of reasoning, have made themselves think
that the ending oi the war should see a decline in cotton, have
had little opposition to their effort, to send quotations lower,
and during the past day or So quotations reached a level approx
mating Is cents a pound, which was a fall of about Il cents, or
500 a bale, from the level reached carly i'll September. The
main basis tor the price at that time going to 50 or 81 cents
a pound was the low condition of the crop, it being figured
that indicated Weld was ll,l5700O bales. II is thought by the
most rampant bear that the yield now promised will hardly
exceed ~l20OO0O~and it remains to be seen how 1t can be
picked.
The decline in price has come chiefly because the channels
OF distribution have been clogged, the main reason for this being
the war, everything having been made secondary to its success
tul promotion. At no time, until quite recently. has there been
serious questioning OF the world needing every bale OF the crop.
1t was flt that the South would have a big task to market lis
crop gradually and avoid saggug prices. but it has been a recent
development to have strong efforts made to force it to sell at
prices which admittedly were under cost of production. More
over, prices for the early receipts were satisfactory, and thus the
producer could adhere to his policy of independence. He was
also able to settle the more pressing OF his obligations, having
passed through the threatened prce-hxng movement without
having to turn himself over to the mercy OF the crowd which
was interested i'll the lowest prices possible, with no regard for
the general welfare of the section or the effect on the credit
balance Of the United States.
But the bear crowd, including spinncrs and those who
cannot with calmness sec the South get its dine r,coer,e of
reward Tor what it does, suddenly developed the notion that
peace would mean cheaper cotton; and they started a Drona-
ganda to that effect which gained much Roadway. Constant
'"~ N'9 HNA>N> WY at lh5t SAOlIu II llEd, intI
even some in the South seem to accept it, The sharp declines
OF the past few days reflect the workings Of the idea, aided by
the active efforts Of a limited number of speculative traders
vino make their money, not from cheap or high cotton, bat from
the fluctuations in price.
One result Of the depression OF values mduly was an order
from the committee on distribution of cotton at Washington. A
branch OF the war industries board, l%orbidding speculative short
selling OF cotton, and limiting sales Of futures to legitimate
hedges against holdings OF the actual, Thus was removed one
Of the mediums-thc main one for the time being-by which
bears were able to carry on their fight to force the South to
sacrifice its cotton, the only supply of consequence in the entire
world, 1t was regarded as a line stroke of Judgment, and its
sole purpose was to help stabilize values at a critical time,
coming as much Of a surprise to the South as to any other
section. 1t was accompanied by a statement from the commit
tees chairman pointing out reasons for the action being taken
and urging the producer and holder to sit steady pending the
adjustment OF affairs, and the assertion Of influences that are
potentially bullish, and almost sure to be manifested very soon.
The burden Of the situation was thus put up to the South
TO carry out the rest OF the program, which is to market the
msold part of the crop gradually, and only when prices are
steady, Ii she will refuse to dump her cotton at sacrifice
figures, and use a little patience, it is believed by the best peo-
pie in the trade, as well as by members of the Washington com.
mittee which promulgated the order, that values will improve,
and at no distant date.
1t is thus up to the producer and holder to do their part
The claws OF the bear have been clipped, for the moment at
least, and now > a time for the display OF some wisdom by the
people who control the only available supply of raw cotton in
the world.
The South can dictate to a large degree the price for which
It will sell the rest OF the crop, and it should do 50. This does
not mean it should be greedy, but it does mean ii ought not
to sell for less than the cost Of production, and Iy the use of
sound Judgment it need not do so.