The news scimitar. (Memphis, Tenn.) 1907-1926, 1920-01-24
COTTON TRADERS
DISPLAY CAUTION
Liverpool Slows Down After Long Spell of BulGsh
Activity, But Bad Weather and Spot Steadlness
Checks Bears-Money Situation Is Important.

reported. However. this failed to dis
turb the spot holders who are no" hp-
parentlv pinning faith on dlitlcullles
attending the growing OF anotaef Ctop
being so nearly insurmountaole ~ :"
preclude raising enough to FIJI REQUIRE
ments. except at high prices FROM
nent among the arguments against inns
being done are the reports OF SLOW
progress in midwinter preparations over
most districts. the mildness OF the NH
ter and its effect on boil weevil actlN,
ties. the assured scarcity Of labor an"
GOOD plantir" seed.
Discount Rate Jumps.
Contributing to the hesitant dispo,,
sition among traders was the continued
apparent deadlock on the ratification
OF the peace treaty. although hopes rose
slightly toward the close OF the Week Week
as to adjustment of differences. Inc
fact also that money rates were pelns
stiffened by federal reserve authoIl
ties, although actual action did nct
come until late Thursday, helped 10
warn against bullish confidence
The elevation of the discount rate
from Az to per cent on commerclaI
paper by three districts, with the resi-
Of them likely to follow. came al!er
the matter Of deflation had been under
serious consideration for some weeks.
The market has been given warning
that that steps were being taken 10
check speculation, and progress towaru
such has been made, but 1t remains 10
be seen how much further 1t VIII go
So far the chief effect has been felt IN
the security markets. but apparently
the intention Is to have 1t reach lur
Their, perhaps. into directions that as
ye4 have not been touched. 1t mas peeh
believed all along that one OF the pur
poses has been to bring about unload
ing of speculative holdings OF neces-
stiles and thereby affect living costs, IL
is waste of space and words to under
take to enumerate the many dlrectlons
in which speculation has extended nor
to what extent values OF practlcaiS
everything have been influenced ny the
easiness of money and the Hberahty OIL
credits.
Jumping Of the rate will enforce re.
strction of credits and elevation OF
rates by the banks which get help from
the federal reserve system, for II they
must pay 6 per cent for their money .Ss
naturally those who borrow from the
banks will have to pay more or De con
tent to confine their needs so as to OBJ
viate rediscounting by the banks. Inc
ultimate consequence Will surely pc
stiffening of all money rates and avoid
ance of future troubles that come from
utter disregard of expenditures. The
| market did not have time Friday TO
give much thought to what the higher
| rates might lead to, having been In a
measure prepared for it, but this VIII
more than likely be one of the dofnl-
nant influences for some time TO come,
1t is argued by the bulls that cotton
will not be affected much, as the South
is so independent, and can wait until
| 1t can get it's price. But such talk
scarcely measures with the reasonable
although the extent of the effect may
be merely toward preventing an ad-
vance to higher levels. 1t will take
| time for the step to make itself felt
but it is the opinion of the best think
er3 that it is the most effective way &c
| cub initiation and bring business bach
| toward a basis that is healthy and
| sound. 1t bespeaks an effort on the
part of the financial leaders, of the
| country to take precautionary meas
ures in time to avoid a wreck on tht
breakers of extravaganza on the part o.
nearly everybody. 1t may become nee
cssary to raise the rate further to brtnf
! the required slowing down. but III th'
meantime some sober thinking is yer!
probably going to be done.