240 COTTON 



contracts solely. There has been no transfer of 

 property. In fact, neither party during any part 

 of the transaction has owned any property except 

 the paper on which the contract was written. This 

 over-trading feature is unreasonable speculation 

 of the kind which works to the disadvantage of 

 legitimate trade, and causes prices to be advanced 

 or depressed without a single act to justify the 

 change in right and morals. 



On the other hand, as we have previously sug- 

 gested, cotton contracts for future delivery may be 

 helpful to the producer, the manufacturer and the 

 merchant, since they tend to distribute the move- 

 ment of cotton through a period of twelve months 

 instead of through a few months only, as might 

 be the case now were cotton sold and moved 

 immediately upon its being gathered. The pro- 

 ducer would naturally suffer because of the con- 

 gested condition of the market. The spinner would 

 profit, since this congested condition would seem 

 to be to his advantage; but in case the spinner 

 should under-buy, he would find it necessary to 

 pay excessive prices because the annual market 

 season would be closed and the speculator would 

 hold the key to the door. Under the present system 

 the market is open throughout the twelve months 

 a condition advantageous alike to both producer 

 and consumer. 



THE EXCHANGE AND THE SPINNER 



The Cotton Exchange has therefore, a side fa- 

 vorable to the spinner. With him cotton is a real- 

 ity: he purchases it for use in his spinning opera- 

 tions, and in the course of six, eight, or ten months 

 it will be purchased by the ultimate consumer. 



