The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1920-10-21
New Orleans Exchange
DecrieS Cotton Panic.
Nothing the Matter With South
Only Lack of Confidence,
Says HI. G. Hester.
LULL TERMED TEMPORARY
Statistical Showing of Cotton
Market Submitted in Urg-
ing South to Hold.
tsy Associated Press,

New OrledAlS, OC6. NO.--lh oou'c
ment prepared at the instance of the
! New Orleans Cotton Exchange direc-
tors and made public tonight. Henry
G. Hester, secretary Of the exchange.
and for 80 years regarded as an au-
thority on matters pertaining to cot
ton marketing. declared there IS mo
reason for rushing federal financial
aid" and asserted there was nothing
the matter with the south beyond an
unreasonable scare in cotton"
The statement prepared for the ben
eft and encouragement of those who
are not fully informed" follows.
THE drastic decline that > has oc-
Cured in cotton, since the first of Au-
gust. amounting to nearly $50 bale
or about 48 percent, has been mainly
due TO the pressure to sell on shrink
age market, undermining confidence OF
both sellers and consumers, accentuat-
ing the fears Of the former and increas-
ing the reluctance OF the latter until
they practically abandoned the market
except at constant concessions Which
in the aggregate probably constitute
the greatest drop that has ever taken
place in the staple in any like period
In the past 10 weeks, more than mil
lion bales Of spot cotton have literally
been thrown over board without
rhyme or reason. Nearly three-fourths
of the Texas ginnings to September
25th have been rushed to market and
while other sections have sold more
sparingly, the reported sales at three
leading Texas centerS have amounted
to more than 100000 bales.
Futures have perforce followed
spots, the pressure having been ac-
centuated by sales to hedge spot.
s.yarious theories have been given
for the scare mainly the question Of
financing unfavorable attitude OF the
federal reserve bank, and tight money
Neither of these. however, should rea-
sonably have precipitated practical
manic. Calm thinkers consider there
WAS no more reason for rushing for
federal aid than during the buy bale
neriod of 1914. We marketed that year
more than was ever marketed in any
year in the history of trade and II we
did not get as much for our bales as
we should have done, we laid the
foundation of an upward trend and
brought more money into the south,
fairly earned, in the years that fol-
lowed. than had ever before been OBJ
tained in our history. Why, then,
should we, after four seasons in which
our raw cotton, including the seed
has exceeded in value seven billions,
nine hundred and seventy millions OF
dollars, balk at carrying few million
balls pending q temporary lull in de-
mand? Has not that very lull been
lengthened by the senseless and unrea-
soning fears of produeers2 OF course.
everybody knows that the government
effort to lower the high cost of living
Ahas exercised some influence, but that
has been by no means entirely respon-
sible for the cotton panic. Let US look
at the government figures for the
months of August and September, 1920,
In face of all the talk about reduction
OF consumption, we find that the mills,
north and south, consumed of cotton
from August to September 30 $4,000
bales. against $4,000 same time last
year, decrease Of only $4,000 bales.
This then was not where the shoe
pinched as far as domestic consump-
lion was concerned. When the mills
became informed of the growing fears
of the southern producers of de-
cline in values, they fell back on their
supplies Of raw cotton and during the
two months used up 436,OO0 bales OF
their reserve stocks. Thus. on July
81. the census said mills north and
south. held 100000 bales of American
lint cotton. while on October 1, the
same authority gave them a total OF
only 773,000 bales In September I'D
face OF the panicky feeling that was
spreading In the spot market. the
southern mills consumed 2Si.oO0 bales
Of line cotton and they held remaining
but about 2S3000 bales, or about one
months supply.
Comparing the situation now With
July 3lst, the showing is:
Stocks, American mills, north and
south, of American lint cotton, July 81
1920 (per census) 100000 bales.
European mills stocks, July 81. 1890,
10000.
European port stocks and afloat for