The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1919-11-30
FOREIGN SALES
COTTON HEAVY
WANNAMAkER SAYS ENGLISH
PURCHASERS REALIZE PROFIT
OF Is CENTS PER POUND.

PURCHASERS REALIZE PROFIT
OF rs CENTS PER POUND.
Columbia, Nov. 29.--J. Skottowe
Wannamaker, president Of the Ameri-
can Cotton association, in receipt of a
letter written by Former Senator
John L. McLaurin. of Bennettsyille,
who has been spending some time in
New York studying the cotton situa-
ton.
'My information leads me to believe
that there is at least 100000 bales of
cotton taken out of American stock
for European account more than there
was at this time last year.. says MIR.
McLaurin in his letter. The former
senator declares that good cotton has
become so scarce that every effort is
being made, by pressure on the banks,
to force liquidation of this southern
account.
Mr.. McLaurin's letter follows in
full:
New York, n. Y.
Nov. 20. 1919.
Mr.. J. 8. wannamaker,
st. Matthews. S. G.
Dear Sir: In complaint with your re-
quest / have spent this week In New
York studying the cotton situation,
and give you herein the results of my
inves legations.
/ find that about one million bales of
cotton has 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
twenty-five cents per pound. There is
also about one hundred thousand bales
of high grade cotton sold from the
south an6 financed by the savannah
and New Orleans banks. The cotton
is or consignment and is held in ware
houses abroad. Good cotton has be-
come SO scare that every effort is be-
ing made, by pressure on the banks,
to force liquidation of this southern
account.
Ny information leads me to believe
that there is, at least one million 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 has been
sold short as a hedge. on this Euro
pean cotton In New York and New Or
leans. The question arises why did
they sell these hodges here instead
of in Liverpool 1t is because of the
financial arrangements connected with
the rules and the classification or
grades in the exchanges. When the
market goes down in New York those
who have bought cotton here have 10
remit each day to the credit of these
foreign sellers the amount or the de-
cline. BY going short in the New YORK
exchange and depressing the market
with the weight of the sales they
force America to carry the actual cot
81, cid w l.
ready been sold to Germany at
profit of twenty-five cents per pound.
Here has?
Here is what I gathered from con-
versation with many brokers ana
scraps of information pieced together.
One combination of capitalists con-
trolls far more December purchases
than there is stock in New York, and
they have ample means to pay Tor
the entire stock should 1t be tender
ed They hold December and when
they sell any December they exact
March from the purchaser to replace
the December, fixing the difference
to suit themselves. There is another
combina ton consisting of the original
December pool, (and others with
them) who control the January option,
and If they get through with De-
cember without having to take any
cotton, it is easy to see that will hap
pen in January with government GER
tificated spot cotton selling at from
five to six cents per pound over what
December contracts are now selling.
The New York stock is slowly melt
ing away because the price here is SO
much below the southern markets. |
that the certificated stock
in New York is only about twelve
thousand bales. What is that against
this one million bales sold short for
European account alone. English
buyers are extending their near
into far months and putting up
margin as a temporary relief until
they can dispose of the cotton TO !
Germany at a big profit. The day of
reckoning will come when they deliver |
the spots to the continent and go TO |
cover the futures here. There is |
natural corner in every month for the I
balance of this section and it will i
grow worse as each option expires.
1t is no longer a question OF high
grade cotton. / think it would be diff /
ficult to set up a million bales of !
high grade cotton in the south now. I
The recent depression in the mar 1
ket came largely from the distortion 4
or federal reserve bank circular num- 1
Der ninety-one and which has been set
straight by Mr.. Harding's letter to /
Senator Owens. The shipments to /
Europe have been practically discon- 4
tinued. not from lack of anticipated 4
profits, but because the southern
banks were denied the financial ia /
cilities to carry that cotton.
In view of the condition of the bank
reserve there are certain financiers in
New York who were interested in
breaking the cottor market so as to
get back southern loans to protect Il
their other interests which We're over
extended The banks of New York
are overloaded with the best of Ameri-