"COTTON FUTURES."

Waikato Times, Volume XIX, Issue 1636, 30 December 1882, Page 6

"COTTON FUTURES."

! ADVICE TO THOSE ABOUT TO SPECULATE, i DON'T. New York, — "Do you see that handsome man buying peaches at a dollar apiece ?" said a friend of mine to whom I applied some weeks ago for information concerning the evils of gambling in wheat and cotton. We stopped a moment to admire some wonderful 1 hot-house peaches, which the person in question was buying at one dollar apiece. " There is a case in point/ continued my friend. "That man is a so-called broker. So you know how he makes his living ? Well, he has done nothing for the last five years but buy and sell a, certain fictitious lot of 100 bales of cotton. He passes his life at it. He buys and sells it half a dozen times a day, sometimes; when the fluctuations are heavy. He does not know one grade of cotton from another; he probably never saw a cotton field, or the inside of a cotton mill ; he seldom sees any cotton, even in bale ; he does not know any ; more than the man in the moon why cotton goes up or down. Yet his interest in life, his calculations, his very being, are centred in that 100 bales of cotton which exist only on paper. He is nothing but an inveterate gambler engaged in fleecing foolish people. In reality, he is no better than the iaro player upon whom the police may pounce — but do ■ not. The social difference, however, is immense : one is a highly respected member of society, who cannot find words too severe for 1 the faro player, while the latter is an outcast. 1 Some day in the chance which comes to all 1 men, once or twice, that man will be carried out of bis depth by some run of luck, and will be tempted to extend his operations beyond that fictitious 100 bales. He may make a fortune in a week, but his chances- of keeping it are as one against a hundred. Once a gambler, always a gambler. He knows no other pleasure. Since he was an office boy he has known and heard of nothing but 1 ' points ' concerning the buying and selling of that 100 bales. He knows nothing about books, art, or music, and of the thaatre he knows only the worst side. His intellectual vision is limited to the antics of that 100 bales of cotton. He is elated or depressed according to its behaviour. When his fetich goes against him and he makes nothing, he is philosophical, rides home in the horse cars, and talks about the evils of speculation and the effects of such fortunes as Yanderbilt's. When his 100 bales make forty or fifty dollars for him, he rides home in a cab and buys peaches at a dollar apiece."

EMBRYO BHOKERS. This is not a pveitj picture, but it seems that it is a true one. One has only to listen to the talk of the fellows who haunt our exchanges to find the material for thousands of such men. They are intelligent yoang fellows in appearance, sprucely dressed, quick in talk, and always with their notebooks, covered with genuine Eussia leather, in their hands. If they have not got to the supreme happiness of actually buying or selling stocks or grain or cotton, they sell certificates among themselves,, which answer the purpose almost as well. For instance, A wants to bet that cotton will go down to-mor-row, and B takes the bet. A gives Ban order for a bale of cotton at ten cents a pound, or in money $45— a bale of cotton being supposed to contain 450 pounds. If the next day cotton has gone down to nine cents, A makes $4 50, for the bale which he agreed to deliver was worth $45 then, and is worth only $40 50 now. The transaction in cotton (?) between these two promising business men is closed by the payment of $4 50 from B to A. Precisely what the boys do with ther fictitious bales of cotton, their employers do with their fictitious 100 bales.

THE LEGISLATIVE INQUIRY. We have recently had here in New York, a legislative inquiry as to' the methods, extent, ev/te of, and possible remedies tor, gambling , in stocks, produce, cotton, etc. So long as stocks alone were used for gambling purposes, it has been thought, erroneoubly, of course, that the rich were the only sufferers by the sudden and fictitious changes in values which sometimes take place at the will of this or that clique of speculators. Only rich people own stocks, it was said, and as to these small speculators who get periodically ruined in Wajlstreefc, it serves them right. But when we come to grain and cotton, that is a very different matter. Few men regard a railroad bond as a necessity of life, and ninety-nine men out of a hundred go through life without seeing or owning one ; but everyone buys bread and cotton stuffs. Therefore, the clique of speculators who by manipulation raise the price of grain or cotton, take just as much money out of the poor man's pocket. Speculation lives upon Budden changes in values. Therefore, it is the object of speculators to effect such changes. A ring of grain brokers buy up all the grain of a certain grade in the market, and up goes the price. Kill the speculators' occupation, and you kill the speculative, market of sudden rises and falls, which makes business feverish, and supports an army of idle men in luxury. The legislative inquiry came to nothing. The fact was developed that there was much gambling going on at our business exchange, that a part of the increase in the prioe of flour, or cotton of last winter (forty per cent.; according to Mr. Jewitt, of the Erie Railroad) can be traced to speculation, and that nothing can be done by the Legislature to stop it — all of which we knew before.

THE 14,000 BEOEBBS. The question : " Who supports 14,000 New York brokers |in luxury ?" must suggest itself to , every one. They cannot live on one another for ever. A gang of sharpers cannot subsist without pigeons to pluck, and the same rule holds good with the enormous gambling rings knoton as the Stock, Produce and Cotton' Exchanges. The speculating public unquestionably pays the piper. Our brokers are notorious for high living and extravagance, and' at -the lowest figures, their earnihgsf must ,cettainly average $4,000 a year. Four/ teen thousand brokers at $4,000 a year, gives ,a total of $56,000,000, which .'represents the sum paid annually 1} by thef public, for. the privilege of gambling/ If this sum is paid to those who simply manage the game— <leal the cards, so to speak, and hold the stakes— what must be the, extent of ihe, gambling going on ? An experienced broker,, who has extensive dealings with the South, recently explained the high price of cotton by the fact that in,some i Southern communities, every man r woman, and child, had been jspeoulainig' in cotton. In the, West the same has' been true of grain,' and just now we are said to be' ; suffering from the , .effects* of \ speculation in meat.,,, people tpoVpopt^to lose, ihanf #5 at a time, club' tbgether and dividethe proi fit or share the loss— ceh'ef ally s >-the ? liitter^

who, having passed years in 'compiling 'and studvingsnborate tables, showing^the flue)., tuatiolff'of cdttptt, hour by ( hour,'i6r i f^oda 'oi, years, "had sjrajjbulated upon the deductions reached,; an|§yit every cent^by jMs sygtein, faster' than .u^ffiey had trusteaftojmok.'. a dozen spepiators are known -toi have $U tired from the Stock or Cpttbn%sxchang|s with* fortunes." - k t|M x> * J&

ORIGIN OF THE lEB.il " BUOKET^HOP."^ If the speculators on the spot, watching the fluctuations of one " point," as they call the tenth of a mill on the Cotton Exchange, as a cat watches a mouse, bavejio little chance of riiakirig fortunes', what oKance'lfave^he outside speculators, who have to do their gambling through,' others? Think r> of getting speculation down to so fine a point that the mill has, to be split up into ten parts; and when cotton goes up or down a point or two, there is immense !< The< term •; v bucket-shop "^ was first applied to the small gambling establishments which went wild over the change, pf a point or two in the market. In the same way that for five cents you can get enough beer dregs in some of the Five Point grog-shops to intoxicate a whole family, so the cheap points- in the cotton market, looked down upon with , contempt by the, Stock Exchange men, give rise to .a wonderful excitement, upon a very small monetary basis. In the, grog-shop, stale, beer is dealt out by the bucketful at a trifling cost; hence the word " bucket-shop as applied to any place where excitement may be had at small cost. But bucket-shops are safer by far than speculating at a distance through brokers ; in the buoket-shop at least you see your money go to, your neighbour who is betting ithat a certain stock will go down, while you have been betting the other way, and you see the whole game as the quotations are chalked up on the blackboard, while in the real market.you lose large sums so quickly that it requires days to understand exactly how it happened.

OVER-SPECULATION. No better evidence of the extent to which speculation in our business exchanges oversteps legitimate buying and selling can< be given, than by quoting from the last report of the Cotton and Produce Exchanges. During the year ending May 27, 1881, actual cotton was sold in the Cotton Exchanges as follows : For export, 143,262 bales ; for spinning, 151,961 bales ; for speculation in actual cotton (holding in store for a rise), 12,133 bales; in transit, 3,160 bales ; total, 310,516 bales, representing the entire strictly legitimate business of the Exchange. During the same peri0d,^6,721,800 bales were .bought and sold for future delivery — that is, prices of paper representing bets on that amount of cotton were exchanged, , no actual cotton appearing at any, time in the transaction. In the Produce Exchange matters are no better. The transactions in wheat for future delivery frequently amount to 20*000,000 or 30,000,000 bushels a day, while in Chicago they are nearly twice as large, and, yet our last crop of wheat only amounted to 300,000,000 bushels. Comment is needless. Respectable business men connected with the exchanges, acknowledge that only about onefiftieth of the business done represents the actual buying and selling of material. And it is getting worse every year. It will surprise a good many persons, to learn, that not in the wildest days of war speculation, when cotton was selling at $1 90 a pound, in 1862, when fortunes were to be made in ripping up old cotton mattresses, when army contracts were flying around as thick as leaves, business at our exchanges was sluggish compared to what it is now. In New York at present there are 7000 stock brokers, or persons calling themselves such, 5000 produce brokers, and 2000 cotton brokers. , Careful judges estimate that about 500 of these 14,000 persons are really engaged in buying and selling actual grain, cotton, or stocks, for persons who wish to export, or weave, or grind, or invest. The 13,500 other well-dressed gentlemen, who pass their lives with their feet up on desks, watching the cotton-ticker through the smoke of half-dollar cigars, are drones gambling on their own, or some-one else's account.

REVELATIONS OF WALIi-STRBKT. The recent expulsion of W. J. • Hutchinson, from the Stock Exchange, may be said to add a new danger to the game of stock-gambling, for what has heretofore been only suspected is now pretty well proved— that the speculator is sometimes at the mercy of his broker, and that the broker is not always above swindling his customer. Men who live by their wits around Wall-street, i kerb-stone brokers, are known to have small scruple in little matters of this kind, but here we have a man who belonged to the Stock Exchange, and was doing as large a business as anyone in the city ; his legitimate commissions- from the Boston man (Duff) whom he is alleged to have swindled, amounted to $200,000, and yet that was not enough ; he must load the ,dice and clip the cards with which he played. To sum up Hutchinson's dealings with Duff in a few words, he gambled with Duff's two millions for three years,' crediting himself with all the profits and charging all the losses to Duff., And yet Hutchinson was a most reputable broker, a pillar of the church, a patron of the Sunday-school, and a leader in society. Wallstreet seemed to be far more indignant because its good name (!) had been smirched by' the scandal than concerned for the unfortunate Duff, whose experience in stock-gambling cost him a considerable fortune. — H. H. H. — Detroit Free Press. i