The Chattanooga news. [volume] (Chattanooga, Tenn.) 1891-1939, 1920-10-21
COTTON SCARE
WITHOUT BASIS
So Declares Secretary Hester,
of New Orleans Exchange,
Regarded as Authority.

New Orleans, La, Oct. 2i.-In n
statement prepared at the instance OF
the New Orleans Cotton Exchange d.
rectors and made public last night,
Henry G. Hester secretary OF the ex-
/ change and for nifty years regarded as
an international authority on matters
| pertaining to cotton marketing. de-
| Clured there is mo reason for rushing
for federal aid" and asserted there
was nothing the matter with the
south beyond an unreasonng scare in
| cotton"
The statement. prepared for tho
! benefit and encouragement OF those
who are not fully informed" follows:
1.-THE drastic decline that has oc-
CURED In cotton . since the first OF
| August, amounting to nearly 500 a
| bale. or about 4s per cent. has been
mainly due to the pressure to sell on n
shrinking market, undermining conf
dence OF both sellers and consumers,
accentuating the fears OF the former
and increasing the reluctance OF the
latter until they practically abandoned
the market except Mt constant con-
cesslons which in the aggregate prob
ably constitute the greatest drop that
hns ever taken place in the staple In
any like period In the past ten weeks,
more than 1000, 900 bales Of spot cotton
without rhyme or reason. Nearly three
fourths OF the Texas gInnings 20 Sept
25 have been rushed to market and
while other sections have sold moro
sparlngly, the reported sales Mt three
%amE Texas @sr. sSn'e sc 900 h sSa.
Futures have perforce followed spots
the pressure having been accentuated
by sales to hedge spots.
No Reason for Panic.
Various theories have been ad-
vnnced for the scare mainly the uues-
OF the federal reserve bank and tight
money, Neither OF these, however,
should reasonably have precipitated a
practical panic. Calm thinkers con-
slider there was no more reason for
rushing for federal aid than during tho
argue, and Justly So that we marketed
IN pnrt and carried over without out
side MD the heavy remnant OF the most
Ftupendous crop produced that year In
the face OF the Inauguration OF a
worldwide war and at a time that tho
south was infinitely poorer than Mt
present. They knew then not only that
cotton was selling many cents per
pound below the cost OF production,
but that II was bringing less than it's
actual market value. even in face OF
adverse European war conditions md
tho promise Of an abnormally large
production (Which finally proved to bo
1900. 900 balcs). and they knew that
the panic could only he temporary.
War or no war. the world needed our
cotton and that II the channels OF
trade were blocked 10 RI time, a way
would be found TO open them in tho
near future. And what did we do7
We marketed that year more than was
ever marketed In any year in the his
tory OF the trndc and II wa did not
- a. To-. -
have done, We laid the foundation for
an upward trend that brought more
money into the south, fairly earned,
In tho years that followed than had ever
before been obtained In our history.
Why then should we after four sea-
tho seed has exceeded in value 81, $40
100000, ballS Mt carrying few million
bales pending temporary lulI in de-
n,and' Has not that very lull been
lenrthcncd by tho senseless and un-
reasoning fears OF producers OF
ornamental efforts to reduce the high
cost OF living have exercised some in
flutncc, but that has been by no mcnns
entirely responsible for tho cotton
panic. Lot us look at tho government
tlFurcH for tho months OF August and
ohout reduction OF consumption, wo
ind That the mills north and south,
consumed OF American cotton from
Aug, ! to Sept. 30, 1874, 600 bales against
Ni3 600 same time last year, n decrease
OF only 60 600 bales. THIS then was NOT
whore tho shoe plnchcd, as far as do
meatio consumption was concerned
!, when the mills became informed OF
inc growing fears OF the southern pro-
uuccrs OF n decline In values they fell
back on their supplies OF raw cotton
ana during two months used up $40, 900
July ri tho census said mills north
ana south held 1,20g,000 bales OF Amerl-
can HIT cotton. while on Oct. the
same authority gave them total OF
face OF the panicky feeling that was
southern mills consumed ISL, 900 bales
INT cotton and they held remaining
but about sS3,0Oo bales, or about one
situation Compared.
Comparing the. situation now with
July 81 tho showing In stocks Amcri-
can mills, north and south, American
,'nt cotton. July a. 1920. tper eensus),
100000 bales; European mill stocks
Jnly 81, 1920, 100000: European port
stocks ana nfloRt for Europe. july 81
l2P3,OOo; total. July a. 2.9l3,OO0; Amer
icAn min stocks. north and south, Of
lint cotton, Oct l., 1920. 77S,OOO; Eu-
ropcnn min stocks. Oct. I, 1890. approxi-
mntc, 100000: European port stocks
md anoat oct. I. 1901 900: total, s,sil,-
600 Decrease lint cotton since July 81,
$4,000 bales
Tn other words. there was a shrink
age In min stocks Mt homo and abroad
and In the European supply OF about
100000 halcs Of lint cotton~-a vacuum
mat must and, win be llled when the
market In permitted to settle down to
normal conditions.
In considering these figures we are
oonnnE with the present, not with tho
past, The upset due In a large pnrt
TO tho scarCs OF holders witch have
reacted upon consumers. unsettllnE both
cndS OF the line, cannot he otherwise
Than temporary, and win hardly AFFECT
~" years consumption Ns n whole
The mills are quite Rs anxious as tho
producers for tho reRumption OF normal
functions, and while confidence has been
shaken, II by no means follows that re.
sumption of normal trading in raw and
manufactured goods must he long de.
laNcd, The remedy lies with tho south
orn producer and holder, who should be
quite able 60 cope with the situation,
Last year | mado the consumntIor
tn bales, 1881 900, including 39b, 0OC
bales OF lintcrs, or l.. 400 600 bales ot
lint cotton, The agricultural depart.
mcnt estimates this years production OF
lint cotton. In round figures. at 1900.
GOO, or less than last years consump-
tlon by 500, 900
1.-THE retail trade, which II tho rca
foundation. Is, We are told by tho best
authorities, proceeding on n nearly nor
mai huvig for Ia