242 COTTON 



in cotton contracts is to his interest; indeed there 

 are times when such trading does operate to his 

 advantage. But the cotton farmer should remem- 

 ber that the machinery of the Cotton Exchange 

 was not put in operation as a means of helping 

 him. The organization came about solely as a 

 provision for facilitating trading in cotton con- 

 tracts, and not with any purpose of decreasing the 

 cost of production or of increasing the selling price 

 of the commodity. It was organized for al- 

 together different objects, and by those altogether 

 unconcerned with the production of cotton. 



Don't be deceived, therefore, into thinking that 

 when cotton futures advance in price, it is an effort 

 to bring profits to the producer. On the other 

 hand, the speculator is assuming these risks neither 

 for the fun of it nor for charity ; it is of gain for him- 

 self that he is thinking. Every unreasonable 

 advance in price is as full of evil to the producer as 

 an unreasonable depression in price. The "cor- 

 ner" profits but few farmers, because the bulk of 

 cotton is already in the hands of the merchants and 

 speculators; hence the farmer has an apparent 

 reward only in the fact that the price has materially 

 advanced beyond normal limits. While this is 

 seemingly favorable to the producer, it acts only 

 as a stimulus to larger acreage the following sea- 

 son and by this time the corner has long exploded, 

 leaving in its wake a depressed market to mark its 

 track, and to receive the new supply (which is 

 probably more than the demand calls for) . Thus 

 the price descends to still lower depths: the latest 

 crop, in all its magnitude and with all its labor and 

 cost is now worth much less than its more modest 

 predecessor. 



But the Cotton Exchange has two sides favorable 



