268 COTTON 



and giving the profit to the intermediary alien the 

 cotton manipulator. 



THE COTTON CONTRACT IS TO BE BLAMED 



It is not our purpose here to discuss the ethical 

 phase of the cotton contract; rather simply to ob- 

 serve its practical workings. The small margin 

 required for operations on the floor of the Exchange 

 puts into the hands of the speculator an unreason- 

 ble amount of wealth altogether out of proportion 

 to his commitment. Said one of those in the game : 

 4 'You get a better run for your money than in poker, 

 in any game of chance, in any gamble." 



To particularize, here is an example : It is pos- 

 sible for a man with but $100 margin to buy or sell 

 in the office of a broker one hundred bales of cotton 

 for some future delivery. At the price of ten cents 

 per pound his tradings equal $5,000 and his cap- 

 ital $100. From its very nature this is speculation 

 of the rankest kind. Under this system it has been 

 shown that " a member of the New York Exchange 

 made contracts for the purchase of 300,000 bales 

 of cotton, worth at current prices then about $24, 

 000,000. This enormous commitment was made 

 without the deposit of any cash guarantee or re- 

 sponsibility, and when default in the contracts was 

 announced it was liquidated at a loss of approxi- 

 mately $3,000,000 to the parties who sold the 

 cotton." 



Do you doubt that so long as such a system pre- 

 vails, extreme and unreasonable fluctuations in the 

 market will occur, and to the great disadvantage 

 of both producer and consumer? Such fluctua- 

 tions occur after the cotton has left the hands of the 



