Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1919-03-07
THE COTTON MARKET.

There Is very considerable confusion
in the cotton trade just at this time as
the result Of the new law that specifies
thirteen grades Of cotton that may be
delivered on exchange contracts.
Monday was a holiday on the ex-
changes because Of the presidents Wis
it to New York and the exchanges
were closed Wednesday in order to
give the members an opportunity to
examine into and try to adjust them
selves to new conditions.
1t Is probably understood that here
tofore very low grade Of cotton was
the basis Of all deliveries on contracts
"a grade Of cotton that was mer-
chantable for some purposes, Of
course; but not available for the gen.
eral purposes Of the ordinary spinner.
It was cotton that would be absolutely
useless to the average spinning mill,
and but few of them ever attempted to
use it. The principal value Cf the
cotton was its use in establishing the
market price Of higher grades Of cot
ton.
For instance, when good cotton Is
moving briskly under the laws Of sup
ply and demand the price Is regulated
to a greater extent by these l-ws and
the price of contracts Is largely infiu-
enced by the same consideration. But
under conditions where the holders OF
good cotton 90 on strike, so to speak,
and refuse to sell on basis Of prevail
ing exchange prices, the cotton gam
blers fall back on this cotton trash of
which they have a large supply, and
continue to play at the regulation of
the prices Of good cotton on the basis
of that.
The Smith-Lever rider that became
a law the other day-Monday-speci-
fies thirteen different grades Of cotton
in which contract deliveries can be
made-and the lowest Of these Is low
middling," being several grades above
the stuff that has heretofore been used
for price regulation purposes, the
whole basis Of exchange Is YER mate
rally changed.
There was naturally very considera-
BILE interest in the market yesterday to
see what would be the first result OF
the new situation, and 1t seems that
the exchanges have again resorted to
the expedient Of 1914, when so many
gamblers were smashed as the result
Of the bottom dropping out Of prices
on account Of the war.
It was held that existing contracts
must be lived up to because OF course
the government could not pass law
affecting the validity Of a contract,
and there must be a readjustment OF
prices on a basis Of new schedule.
This means that whereas former con-
tracts were based upon the existing
sock of unmerchantable cotton, the
readiustment must be based upon the
lowest grade in which the government
would permit deliveries, which lowest
low middling-is Several grades
higher than that in which deliveries
have heretofore been made.
The first figures Of the morning
quoted October at 1910 on a basis OF
old contracts and 20.30 on basis OF
new contracts, and the noon ngures
gave N21.15 as the price OF old May
contracts and 22.26 as the price OF ne"
May contracts.
This means an immediate advance OF
Ito in exchange prices; but 1t Is not TO
be understood that the actual price OF
cotton has yet been affected.
On a basis Of the new quotations 10
cal BUYERS would be warranted IN Of
fering about rs or 26 cents for spots
sure enough good cotton-but even at
that there is not buyer in the coun-
try who would under AXE, on his own
responsibility, to sell 100 bales OF cot.
ton at 80 cents pound, unless, lnueeo
he already had it bought. There
would be no trouble in buying the cot
ton at IS cents; but it could not be
bought for 80 cents-not in this Sec
ton. -,
There are those, of course, who will
claim that the effect Of the new law Is
to advance the price Of cotton LILO
pound at once. That Is apparently
true; but not literally true. The prob
ability is that the actual trading has
been light and of tentative nature,
merely to readjust the schedule
on the new basis Of little higher
grade Of cotton that may be delivered
on contract. But there are mills that
can easily spin the low middling that
can now be required, and II the price
of it is too low these mills will soon
buy up the stock, and run sellers OF
this grade into new high levels.
What the farmer wants Is to require
every cotton exchange contract to be
made on the basis Of a specified grade
and to require the delivery Of the
grade specified upon the demand OF the
purchaser.