COTTON 237 



troubles incident to movement, storage, insurance, 

 and other risks. 



So far then we have found no objection. Spec- 

 ulation you may call it, but legitimate; since a 

 commodity has been purchased for real actual con- 

 sumption. But at this point a new actor struts 

 upon the stage one not concerned with the pro- 

 duction, consumption, or movement of cotton; it 

 is the professional speculator who sees an oppor- 

 tunity to take advantage of a peculiar condition of 

 trade, and who, if he is careful and wise, is certain 

 to profit by his anticipation of the way in which the 

 law of supply and demand will likely operate; he 

 will meet this condition by ascertaining in advance 

 in every way possible, the probable direction this 

 fundamental law will take. 



THE COMING OF THE COTTON EXCHANGE 



So great was this new feature in the movement 

 of cotton from producer to consumer that it became 

 necessary to bring form out of chaos: it must be 

 organized, else it might break itself into pieces. 

 And there was too much good, too much intrinsic 

 worth in it, for this to happen. 



Consequently in the early 70's Cotton Exchanges 

 were formed in New York, New Orleans, Liver- 

 pool, operated under rules and regulations intended 

 to protect their own members and facilitate the 

 trade of buying and selling cotton. The central 

 idea in these exchanges was to provide machinery 

 that might facilitate the dealings in "options" or 

 "futures" as they have always been called. 



And what do these terms mean? We will ask 

 a member. He says: "They are called options 

 because the cotton contracted for is deliverable at 



