The Bossier banner., 1922-11-30
Wall Street Control of Cotton Prices
Costs Cotton Planters Millions Yearly

cotton that they lose appreciation Of
its merits, and do not seem to know or
care whether they are trading in cot
ton or chalk-marks. Their consuming
purpose is to grab profits ON contracts
as quickly as possible.
The future exchange, as we see, is
the gambling side of the cotton busi-
ness, and. therefore, the rotten side.
1t is more of a sham than an essential
cotton markets clearing house for
gambling in fictitious cotton. 1t has
certain beneficial features which will
be shown later.
As an illustration of how some busi-
ness men regard the vocation Of broker
and speculator, a story comes to my
mind about cotton broker who went
to considerable effort to compile and
print an elaborate booklet on cotton
speculation and prices. endeavoring to
show his clients what he knew on the
subject. He mailed several thousand
copies to them, and then waited to re-
ceive their complimentary remarks.
The first reply was from a business
man in Texas, who returned the book
let with the following words written
across the title-page: Why don't you
go to work." Although the broker
would laugh When telling this story, he
confessed that the words aroused in
him deep chagrim.
Markets, like individuals. cannot
move in an orderly way without rec
onized leader, some leading market to
guide the smaller markets in quoting
prices. The New York Cotton Ex-
change although from 1000 to 5000
miles from the eastern and western sec
tions of the cotton belt, and handling
less thaaa 5 per cent OF the tChOle crop,
holds the distinction of being the all
powerful leader of cotton prices. Its
s,raU oUer the Southern spot markets is
so fdr-redching and inerordble, that
cotton merchants in those markets can
not afford to buck this influence and
Keep solDent Consequently, ,chen
prices at Neu York decline, prices in
the Southern spot markets invariably
decline.
ACCEPT NEW YORK PRICES.
Why this power? Because the COM
mercial world accepts the New York
Cotton Exchange as the head of opera
tions, the official trading center Of the
cotton world, the index Of supply and
demand. And the powers behind the
Exchange have the money and organi-
zation to hold this recognition, In spite
of the fact that it is an ignorant de-
lusion.
The Liverpool Cotton Association
was the mighty leader Of prices until
the outbreak of the World War. This
leadership resulted from the fact that
three-fOurths of the cotton raised in
America was exported to Europe, chief
ly to England, and also because London
was the money and trade-acceptance
market of the world. Liverpool was
more or less the dictator of prices. If
prices at Liverpool declined, but Amer
lean markets failed to follow, London
financiers. who were the source Of most
Of the loans on cotton stocks, would
often get busy calling the loans, forcing
up rates on mOney, and in this way
compelling American holders to dump
cotton and break the American market.
The financial powers of England en-
plOyed every means to wrest cotton
from American growers as cheaply as
human ingenuity could get it. Southern
planters received 20 cents a pound, as
an average, for their products for thir-
ty years after the organization of this
association. Thus, kept in poverty,
they were forced to sill the greater
portion of their crop in the autumn, at
or below the cost of production. Natur-
ally, they were slaves Of perennial debt.
The war changed this monopoly and
shifted the balance OF power from Lon
don to New York, the present money
market of the world American con-
sumption Of cotton has increased so
per cent in five years. American mills
now consume as much of the Southern
crop as foreign mills combined.
If English interests attempt con-
spiracy to force down prices, they can
no longer effectively employ the ma
SbiuClS VI A<lN lIOOi dUu Tie dlu Oh
London bankers to do the trick, but
must secure the support of New York
interests and manipulate the New York
Cotton Exchange by wholesale short
selling. a nefariOus method Of trading
with evils that are not fully under
stood
The fluctuation of prices offers a
strong temptation for easy money.
Fluctuation invites speculation, which
in turn creates greater fuctuation.
Both the fluctuation Of prices and Spec
ulation have increased in recent years,
aided by the elaborate wire and cable
systems which make the world homo
seneous unit. As an illustration of how
quickly inhabitants of remote regions
can trade on New York and Chicago
Exchanges, the following occurrence is
given from my personal experience /
purchased corn futures" on the Chica-
go Board of Trade, through broker Of
Birmingham, Ala. then went for an
outing in the southern part Of the state,
about 100 miles from Birmingham. On
Saturday. a few minutes before the