Newspapers / The Charlotte Observer (Charlotte, … / Feb. 4, 1917, edition 1 / Page 14
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u CHARLOTTE SUNDAY OBSERVER, SUNDAY, FEBRUARY 4, 1917. Bale of Cotton, Scrap of Paper Cotton Student's' Plan to Bring Futures ot Parity With Spot Cotton. From The Savannah Morning News.) The Morning News has received the following from a "cotton student:" Owing to the prices quoted on the New York Cotton Exchange for con tracts to deliver cotton during future months, the holders of spot cotton -in thm South are confronted with a situa tion where their middling cotton, based on futures, is worth today ap proximately 16 1-4 cents that is to ear, in order to buy cotton and ship it to New Tork and tender it against March contracts sold January 24, it would bo necessary to buy at less than 1 1-4 cents, basis middling. The owners of spot cotton in the South believe their middling cotton to be worth In the neighborhood of 20 ls, and the sellers of "paper" cot tl.cn New York believe it to be worth n?2fly four cents a pound less. If the spot holders in the South are light, how can they demonstrate to the parties dealing in future contracts in New Tork "that this is the case? In order to correct an evil It is necessary to understand the (situation: Demand the Cotton. The purpose of this article, there fore, s to explain how New York fu ture contracts can be depressed so far below the parity of spot cotton in the South, and to suggest a remedy. Thre are in New York today ap proximately 55,000 bales of certifi cate, cotton, of which very little more than 5.000 bales grade below Ameri can middling. In other words, the en tire trading in the New York Cotton Exchange is based upon a certificated stock, nine-tenths of which grades American middling and above. Not only does this mean that the grade is American middling, as certified by the proper United States Government authorities, but it means that the dif ferences between grades are fixed un der the terms of the Smith-Lever bill. It is impossible, therefore, for sellers of contracts in New York to deliver Improper grades at improper differ ences. Every man who buys a con tract in New York and demands the actual cotton, will receive Govern ment grades at market differences. The holders of the - certificated stock in New York are in a position to dictate the course of prices to a very large extent. To illustrate this, it Is only necessary to realize the principles on which all clearing houses are operated: If A owes B a dollar, and B owes C a dollar, and C owes A a dollar, then a dollar Which starts in A's pocket can circulate through B and G and back to A, and the same dollar can pay three sets of indebtedness, and wind up where it started. By comparing obligations and swapping receipts all of these debts can be liquidated without the dollar jever leaving A's pocket. Very few people wh trade in contracts ex pect or desire to handle the actual cotton. There is a certain amount of expense connected with receiving and tendering cotton, and nearly all buy ers of contracts prefer to sell out their holdings at the market differences rather than to accept cotton when it is tendered to them. Many of these holders of ' long" contracts are un able to take up and pay for cotton, no mattt r how cheap the cotton Is when it is tendered to them. Relying upon this well-known disinclination to accept spot cotton, it is an easy matte for the holder of the certifi cated stock to tender the actual cot ton to those who are "long" of the current month, and force them either to accept the cotton or sell out their notice of an intention to deliver cot ton is issued by the holder of rhe certificated stock, and those who have bought contracts immediately try to seli them out. thus causing a com petition of selling in a narrow mar ket, which immediately depresses the price. The holder of the certificated stock by judiciously circulating no tices, can depress the market far be low its real value, and at the end I wind up by still owning the certifi I cuted stock. t A Rare Opportunity. I It seems curious that " buyers- of contracts will run away from $90 a ! bale cotton when it is offered to them jat $80 a bale, but if their resources a re such that they cannot finance lover $10 a bale, the relative cheapness of the cotton offered them is oi no value to them. The owner of the cer tificated stock can only carry out this policy as long as the buyers of the contracts are afraid, or unable, to ac cept the spot cotton-when tendered. The instant that the buyer accepts the cotton tin technical terms "stops the t notice"), the whole situation changes, land, if a large short interest has been created, it is absolutely necessary for i that interest to secure from some where actual spot cotton to nu ra contracts. The present situation in New York presents a rare opportunity for an ex ceedingly profitable investment. Jan uary contracts in New York closed on T .... 91 t 1A 7.74 Mnt9 Araum- I jaauaij -" . . . v - - - - bought at 17 cents, a 500 pound bale of American middling would cost $85. and banks would certainly be willing to advance $65 per bale (or 13 cents per pound) on such cotton. A party buying a contract for 100 bales would have to put up only $2,000 cash to pay for the spot cotton. The cost of receiving and shipping same to a port like Savannah would not exceed 60 points. It can be carried here very cheaply. If 560 people were to buy 100 bales each and demand delivery, thev would absorb the entire contract stock in New York, and if they could get the cotton at 17 cents they would almost certainly have an immediate profit, since the shorts in other months would all endeavor to cover, and the market would be forced to a point where it would attract cotton from the South based on the present ruling quotations there. Cotton pur chased in New York on a basis of 17 cents there for American middling is the cheapest investment which pre sents Itself in this country at this time. Here, then is the remedy for a false Situation : Let those cotton men who read this article immediately wire to know at what price they can buy the current month in New York, stating that they Intend to demand delivery of the cot ton. It is not likely that they will be able to buy as much as 25,000 MID-WINTER EXCURSION -TO- WASHINGTON, D. C. VIA Southern Railway Wednesday, Feb. 14th, 1917 THE SOUTHERN RAILWAY will operate low round trip fare excursion from North Carolina points to Washington, D. C, Wednesday, February 1 4th, 1917. Special train consisting of Standard Pullman Sleeping cars and high class day coaches to leave Charlotte at 8:45 P. M., arriving Washington 8:00 A. M. Thursday, February 15th. The following round trip fares will apply from stations named below From X Charlotte $.7. So i Concord 7.50 f Salisbury .. J.oo Lexington 6.5o High Point 6.50 . V I ireensnnrn ft nn . A w.v-v, PIVin x 7 to LT , . JU Hickory 7.50 Statesville 7.00 Morganton 7.5o North Wilkesboro 7,40 Mount Airy 7.50 & Albemarle 7.00 Winston-Salem 6.5o Siler City 7.00 Fares from all intermediate points same basis Tickets good going only on special train. Good returning on all regular trains except train No. 37. Passengers on branch line points will use regular train to junction point, connecting with special train. Tickets good for three days in Washington. See Congress in session and the other attractions at the Nation's Capital. Pullman reservations should be made in advance. 1 For full and complete information,. Pullman reservatons, etc., consult nearest Southern Railway agent, or write S. E. Burgess, D. P. A. aura.orrErN."C" bales, and the mere receipt of this inquiry by the New York brokers, and the announced intention of accepting delivery will put the market up any where from l cent to 3 cents per pound. If it is desired to correct the abnormal discount now prevailing in New York, and to bring New York futures in line with spots, the way to do it is to buy futures and. demand delivery of the actual cotton, and there is no other way to do it. ' Supply and Demand. To show that the situation in New York is entirely abnormal afnd un reasonable, we quote the following ex tracts from The Journal of Commerce of January 23: "Whenever selling orders appeared professionals, in popular parlance, 'helped them self There was more or less Belling by Wall Street; the South, the West, and as already in timated, local traders sold at every opportunity. But there is no disguise Ing the fact that nine men out of ev ery ten are bears on cotton. Most people see no good in it Sentiment, from being very bullish a while back, has swung to the opposite extreme. Nobody can see any good in cotton. It is going to 15 cents for May. There is plenty of cotton. There will be more than plenty if the exports are sharply cut down by raiders and al lied economy. Meantime there is that big acreage, perhaps a big crop loom ing ahead. And so on. This is the time when It is considered the thing to sell cotton on bulges'." As to the supply and demand. In its relation to the dry goods trade, the circular of January 16. 1917. of the First National Bank of Boston said: "Cotton manufacturers are unable to foresee any early reduction in the costs of production. The most recent cotton figures show an excess of cotton exports over 1915-1916 of 844,166 bales, a lessened world's visible sup ply of 437.663 bales, and a lessened visible supply of American cotton of 216,663 bales compared with the January 6 period of a year ago. The last ginning figures of the Government (January 9) showed a total of 11,045. 225 bales, the Government crop esti mate for the season being 11.511,000 bales. The heavier character of the cotton goods output, together with an addition to cotton mill spindles in the South alone last year of 614.682 (or ders booked for 280,000 more), war rant the assumption that the con sumptive requirement for domestic mills will be substantially greater than a year ago, when it was 7,240,009 bales. These figures lead to the infer ence that raw material can continue high for some time, and at present, there is little or no indication of an early decline in other costs." "Frwte to Your Spots. With regard to the submarine men ace, it is well to point out that the exports are already nearly a million bales larger than last year, and that exports have got to fall off a million bales during the remainder of this sea son in order to bring exports down to the same figures as those prevail ing last season. Is it reasonable to suppose that the German submarinea during the remainder of this year can reduce America's exports a million bales If Europe really wants our cot ton It is admitted on all sides that if every bale of the American supply of July 31 last, plus the American crop of 1316, is available for consump tion, it will still leave a dangerously small surplus on July 31 next. It is quite possible that a considerable por tion of the American supply will not be offered for sale at all unless prices advance, because many holders be lieve that cotton will reach 25 cents or 30 cents when peace is declared. With the menace of the boll weevil, the shortage of labor, the inferiority of the fertilizer, the uncertainty of the weather, the certainty of a small sur plus, the possibility of peace and the excellence of the dry goods demand, it seems a trifle dangerous to sell short in New York, a market which is now at least 100 points below the parity of spot cotton everywhere else in the country. If holders are willing to disregard futures and cover up their samples during the present dull period they will reap a rich harvest when the bad crop accounts begin to come in. as they most certainly will at some time before the new crop is harvested. Bears are going to predict a con tinuation of the war. an 18,000,000 bale crop, a 14,000,000-bale demand, until they have dislodged the unsold spot cotton and gotten possession of it at 15 and 16 cents; then they will announce that the war will end; that there will be an 18,000,000-bale de mand, with a 1 50.000. 000-bale crop, and they will proceed to ask 3i cents for the cotton they have secured at 15 cents. As the editor of The Cot ton and Cotton Oil News has said "Freeze to your spots and let the shorts sell their heads off." To which should be added: "Buy a few hun dred bales of New York futures and demand delivery." SERIES OF EXTENSION LECTURES SCHEDULED Six Members of University Fac ulty to Speak in Charlotte Dur ing Course of Winter and Spring. , . - An announcement that will be of Interest to a large number of Char lotte's citizens is that there will be a series of University Extension lec tures, to be promoted under the Joint auspices of the Mecklenburg Alumni AssociaUon of the University of North Carolina, and the Young Men's Chris Uon Association. These lectures will take place at Hanna Hall of the Y. M. C A. The speakers will include the lead ing professors of the State university Following is a list of speakers and the dates of their appearance: February 16 Prof. Andrew Henry Patterson, of the chair of physics and astronomy, will speak on the subject. "The Story of the Stars." This lecture will be illustrated by a stereopticon. March 2 Prof. Eugene Cunningham Branson, professor of rural economics and sociology. Subject be announced later. March 11 President Edward Kidder Graham. Subject to be an nounced. March 23 Dr. William What ley Pierson. Jr.. instructor In history. Subject. "Trade Relations Between United States and Latin Am erica." April 13 -Dr. Archibald Henderson, professor of pure mathe matics. Subject to be announced J later. April 27 Dr. Edwin Greenlaw. ; professor of English. Subject, "Litera ture and the World -Crisis." May . Dr. Horace Williams, professor ; of philosophy. Subject to be announced later. The announcement of the above course of extension lectures will be received with unusual interest by those who are desiring to continue to T'nivAi-wltv mnA th. 9rrii rt Ha m u The course will be promoted by an inner circle" of university and associa tion men. who will pay the expenses, thus giving an opportunity to all others to attend the lectures without charge. The local committee having charge of the promotion of these lectures, ap pointed by the Mecklenburg Alumni Association, is as follows: W. T. Shore, chairman: Dr. XX B. Ross. G. W. Tillett. Jr, and D. U Probe rt. TO CELEBRATE PASTOR'S SECOND ANNIVERSARY WILL GIVE RECEPTION TO NEW DURHAM PASTOR Special to The Observer. Durham, Feb. S. Baptists of Dur ham are planning a reception In hon or of the arrival of Dr. B. D. Gaw. of Washington. D. C. who has accept ed a call to the pastorate of the First Baptist Church in this city. A com mittee composed of each Baptist min ister and three laymen from each church are planning a reception. Doe tor Gaw has written that he will ar rive February 10. April 6 has been selected for the. observance of Charlotte's second "bird day." and various prizes will be of fered to the children of the city in several amerent pnases or the occa sion's observance. To encourage pub lic interest, and especially the chil dren, in the preservation of bird life, the day was inaugurated last year and its first observance in this city was a complete success. ., - The committee, having in its charge the preparations for the day, has an nounced that three prizes will be of fered for the first, second and third best bird houses constructed by Charlotte children. The first prize will be 35: the second, a year's sub scription to The American Boy, and the third, a one dollar bill. Dlnu. tions for the making of bird houses may be obtained by prospective en trants at the Carnegie Library. In addition to the boy's contest, there has been arranged a "snap shot" event for girls. The girl sub mitting the best photographic pic ture of bird life, will be , presented with a tennis racquet The committee in charge consists of Mrs. William H. Jasspon, from the Woman's Club; Miss Anna Pierce, children's librarian at the library, and C E. Lacey. head of the manual training department of the Charlotte High School. For either brain or muscle Bakerls Cocoa ireskind. contains mo u is re contains more nourbkaentriianbeer Waller Baker & Co. Ltd ESTABLISHED I7GO DORCHESTER, MASS. J FUNERAL OF FORMER CHARLOTTE RESIDENT The funeral of Mrs Alice Carter, who died Frid-iy morning at 2 o'clock in Albemarle, will be held this after noon at 3 o'clock from Brevard Street Methodist Church. The services will be conducted by Rev. L. A. Falls, of Mooresville, former pastor of the Church, assisted by the present pas tor. Rev. J. L. Cardell. The pall bearers will be: George Teeter. C. W. R-rmsej Ned Hall. John A'ogler, Xat White and J. L. Redwine. Mrs. Carter, before her marriage, was Miss Alice Hargett, of this city. She had been ill practically for the la3t two years and her death had been expected for some time. Dur ing the course of her residence in Charlotte, sne had Ix-en a consistent and active member of Brevard Street Methodist Church. RANGE EXPLOSION HURTS NEGRO CHAUFFEUR BADLY Special to The Observer. i CITn.v. V! r foil S Inhn Vn..l ! colored chauffeur for Dr. S. B. Sher- ;ard, is lying at the Gaffney Hospital i seriously injured, caused by the ex ' plosion of the range in Doctor Sher l.ards citchen today. The whole front I of the range was blown out, striking him on th head and chest Mrs. Sherard was in the kitchen at the time and narrowly escaped injury, i While it is probable that the negro will recover partially he will be per manently injured. DR. ORR RETURNS FROM SUCCESSFUL REVIVAL Dr. W. W. Orr, pastor of East Ave nue Tabernacle, A. R. P.; has returned irom urovg tuy. r.. wuere uo cun- j ducted a series of evangelistic ser- j ; vice which lasted for" three weeks. 'During this time, there were 124 pro- ; fessions of faith and between 7U0 and, 800 people consecrated their lives to , the worship and service of God. j LOCAL PYTHIAN ASKED TO DELIVER ADDRESSES; Mr. Ground Hog Came Out Looked Around Spat Arid Went Back In Again THL o a WILL BE B1D-- SIX WEEKS MORE MORAL : Take your CAR from your Garage look around and put it back in our shop for painting or something You can't have any fun by driving it now, but you will get a lot of satisfaction from the improved appearance later on. SHALL WE SEND A MM TO MAKE THE ESTIMATE ? Past Grand Chancellor J. G. Baird. ; has receive i two invitations within 1 the past few days to address Pythian j meetings during the month of Feb rtmnr Thrtrrlirs-wir?lfJ side lodge. K. of P or February 17, j anJ the, second Is ti e annual banquet , of White flak lodge, at Rock Hill. 1 S. C oii February 23. Charlotte Wagon & Auto Co. 26 East Sixth Streetr Phone-2683
The Charlotte Observer (Charlotte, N.C.)
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Feb. 4, 1917, edition 1
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