The Birmingham age-herald., 1920-05-06

l lated when there was nothing to re- strict them, when the markets of the l world and the exchankes were. open everywhere-that the war committee, | of which MT. Baruch was chairman, ] proposed to get them into manufacture by allocating a million bales of low grade cotton to all the mills of the
 country That is. they proposed to allocate this quantity of wgrade cot
 ton and make the mills take it, whether they desired it or not or
 whether they could use 1t or not-a
 million bales of 1t.
 This purpose was published; and while it was never enforced, the very suggestion of it put cotton down 5 cents per pound, and Congress had to pass a law that the exchanges could
 not put cotton down more than cents per pound a day. This was when they
 had free exchange and all grades of l cotton were tenderable. If as Messrs Beer state, the exchanges influence and increase the use and protect the value of low grade cotton. where were the exchanges then? Certainly, one blast of Rhodericks horn would have been worth many millions of dollars to the cotton holders.
 The Messrs. Beer, with their pro- posed advantages to off-grade cotton in having it made into tender, for get that the cotton trade has been
 through all those debauching condi- tions in which they have been viciously robbed, and the suggestion by them to
 go back is comparable only to the memory of the Israelites' journey, the Promised Land ahead and the flesh
 pots of Egypt behind yet there were
 those who wanted to go back; and there are those today, I will say to the
 Senator from North Dakota (Mr. Gronna), who want to go back.
 They charge that this is a spinner's contract and will hurt low grades of
 cotton. In it's last analysis it is the spinner's demand and use which, being
 greater or less than the supply, makes l the ultimate price of cotton. Of course, it is the spinner's demand that makes
 the demand for cotton. How else are you going to get a market for it? If
 there is more spinner's demand for
 any grade of cotton than there is of
 that cotton, then that cotton is rela-
 lively high. If there is less spinner s
 demand for any grade of cotton than
 there is supply the price of that grade
 of cotton is relatively cheap. That is
 the law of supply and demand You
 can not get beyond it. It can not be
 changed by contrary statements made by Messrs. Beer or anybody else.
 IHe proposed contract WILL In the : largest measure enable the spinner tc , utilize the purpose for which the ex- changes were established, that is, ir the fall of the year when the offer } ing of cotton is most abundant, the spinners will become buyers, nurchas ing cotton and storing it in their owr warehouses ahead of their sales. TC
 protect this class of purchase they would sell an equal amount of cottor on the exchanges with perfect conf. 7 dence that the exchange value would l represent the spot value. In the same manner if the spinner sold goods } ahead, then he would buy on the ex- change a relative amount of cotton l and as he bought the spot cotton tc } cover he would sell the hedge. The same way with the dealer in cotton l mentioning particularly the letter , herewith printed of Messrs. w. P Welch & Co.,, large cotton factors al Selma, Ala. They haO an opportu. ' nifty to buy 1000 bales of cotton foi 7 which they have no order. They buy : it, sell contracts against it, and again if they should sell 1000 bales ahead of what they had. they would buy l contracts against it; and in both cases when they had sold~ the cotton ol bought the cotton, they would close } out their hedge-close It out with con. } fidence that the futures contEact, rep resenting the fair value of spot cottor 5 and not an oscillating basis midling
 as now, would be business protec. tion. This kind of transaction woult greatly benefit the producer because at all times he would have a marke at market value for his cotton; ant : this is a business protection that le gitimate dealers in cotton have 7 right to demand that Congress should give. Thus would the exchanges func 7 ton in a legitimate way, providing al accurate index to the commercial value of cotton.
 | They would be a hedge; they would be an index of the market-not maker: : of the market price. but an index O r the market price. That is what thu l exchanges should be. Cotton value. : are not made through the exchange , You can turn the value around witf the exchange in an unnatural manner but the natural price of cotton every
 where in the world is the supply ant , demand price, and you can not ge beyond it.
 At the recent cotton convention ir : Montgomery one of the resolutions , adopted was that a committee of busi- ness men should go to Europe to sec the spinners and try to sell the cot ton direct, eliminating the dealer; ant 7 yet the exchanges took possession oi that convention, controlled its com mittees. and MT Thompson. ex-presi- dent of the New Orleans Cotton Ex- : change, used every effort that the } Conner amendment to the cottonfu- f lures act should be sequestrated should not be indorsed
 Ex-Senator Frank S. White, Mir. M , C. Allgood, commissioner of agricul- . ture of Alabama Messrs. J. O. Thomp- $ son, and G. E. McElderry. and Gen Bibb Graves, recognizing the impor- tance of 1t to the cotton interests, not
 only of Alabama but of the whole South. by the most earnest effort had the amendment brought out of the | hands of the sequestrating committed and discussed on the floor of the con
 venton, and notwithstanding the most } unfair methods used to suppress it the amendment was indorsed by the convention
 : This was brought about by the
 splendid service of the gentlemen , above named; and notwithstanding tha : fights against the appointment. not l withstanding the flight against the , spinner, one of the constructive things : the convention did was to send a dele gation to the European spinner, not to the European cotton exchanges. but to the spinner to sell the cotton direct ; As against H. & B. Beers statement I introduce the statement of W. P l Welch & Co.,. Selma, Ala. large cotton factors, engaged in business for many r years and very reliable.
 Selma Ala. April 20, 1920. 5 Hon. B. B. Conner.