Greenwood daily commonwealth. (Greenwood, Miss.) 1919-1926, 1919-12-08
Is Advice Ex-senator McLaurin. Who
Says Short Sales Total Million
Bales-Predicts Higher Prices.

cotton have been sold through New
York and New Orleans Exchanges for
English account. Most of this cotton
has already been sold to the Continent
by English purchasers at a profit of
25 cents per pound. There are also
about 1OC, 900 bales of high grade cot
ton sold from the South and financed
by the Savannah and New Orleans
banks. This cotton is on consignment
and is held in warehouses abroad.
Good cotton has become SO scarce that
every effort is being made, by press
of this Southern account.
"My information leads me to believe
that thert are at least 100000 bales
of cotton taken out of American stock
for European account more than there
was at this time last year. Most of
this cotton is either stored in Europe
or en- route, so that all of it is ready
to sell when the foreigners are able
to pay for it. One million bales have
been sold short as a hedge on this
European cotton in New York and
why did they sell these hedges here
instead of in Liverpool? It is because
of the financial arrangements connect
ed with the rules and the classified
ton of grades in the exchanges.
"When the market goes down in
New York those who have bought cot
ton here have to remit each day to
the credit of these foreign sellers the
amount of the decline. BY going shor
in the New York Exchange and de-
pressing the market with the weigh
of the sales, they force America to
carry the actual cotton on the othe
side, which has already been sold t
Germany at profit of Is cents per
pound.
"Here is what I gathered from con-
versation with many brokers and
scraps of information pieced together
One combination of capitalists, con
trolls far more Dec. purchases than
there is stock in New York, and they
have ample means to pay for the en-
tire stock should it be rendered. They
hold December, and when they sell any
December they exact a March from
the purchase to replace the Decem-
ber, fixing the difference to suit
themselves.
"There is another combination con-
'sisting of the original December pool
( \ ho
the January option, and if they ge
through with December without hav-
ing to take any cotton, it is easy to
see what will happen in January with
Government certificated spot cotton
selling at from 5 to cents per pound
over what December contracts are
selling
"The New York stock is lowly melt
ing away because the price here Is
much below the Southern markets. l
understand that the certified stock in
New York is only about 10000 bales
What is that against this 100000
bales sold short for European account
alone?
English buyers are extending theil
near months into the far months ano
putting up margin as temporary re-
lief until they can dispose of the cot
ton to Germany at big profit. The
day of reckoning will come when they
: deliver the spots to the Continent ant
| go to cover the futures here. There i
a natural corner in every month fo
5 the balance of this season and it will
t grow worse as each option expires. l
( is no longer question of high grad
5 cotton; think it would be difficult t
' get up 1,OOO,OOO bales of high-grad'
: cotton in the South now.
"The recent depression in the mar
e ket came largely from the distortion
) of Federal Reserve Bank circular Nc
j 81, which has been set straight b.
$ Mr.. Harding's letter to Senator ~Ow
$ ems. The shipments to Europe hav
been practically discontinued no
Il from lack of anticipated profits, bu
r because the Southern banks were den
: led the financial facilities to carr
that cotton.
$ ssIn view Of the condition Of tn
: hank reserve. there are certain finar
ciers in New York who were Interest
g ed in breaking the cotton market
o as to get back Southern loans to pr
e tect their other interests which wer
+ over-extended. The banks of Ne
York are overloaded with the be-
American securities. and have loane
too much Of their capital to Europ
r They do not care to help the Sout
,t1 carry cotton because they have g
Al themsf1Hes in place where they q
4 compelled to carry other things or !
cur loss They are telling the banl
Of the South that they must take ca
Of their own cotton, and are saying