to everything. I am an old bachelor. Some of you gentlemen have married, doubtless happily so; you all look like it. You have taken bigger chances than I ever did. You are successful. But I would never even take a chance on that [laughter]. I do not know anything in life but what has an element of chance in it, speaking of that. I do not defend gambling. It is wrong; it is demoralizing when done to excess, but so is the most legitimate thing in the world. Any man who overworks himself will find he has a case of "nerves" before he gets through with it. You can study the most legitimate thing in the world and it becomes wrong when done to excess. There is an element of gambling, gentlemen, in most anything, an element of chance.

I have had mill men come to my office and inveigh against the fluctuations in the cotton market. Gentlemen, it is these very fluctuations that enable these very mill men to make profits. If we had a market that was stationary, everybody could figure everything down to the most minute degree. Then it would be mighty hard on the poor fellow. The rich fellow could grind the poor fellow out sure enough then.

There was one gentleman yesterday asking something about cotton goods. The question of shirts came up; I believe it was brought up by Mr. Brooks. I am a stockholder in a mill that makes as staple goods as anything I know of in cotton goods. I suppose you all know what gingham is. A staple gingham is as staple in dry goods as sugar and coffee. To give you an idea of what this advance in cotton means, comparatively, this piece of cloth sold last year at 4 cents a yard. Cotton was 94 cents a pound at the time they sold those goods at 4 cents a yard, and, gentlemen, that mill made big money. That same goods is now bringing 5 cents a yard, only a cent and a quarter advance, but, gentlemen, let me show you what that means. It takes 6.61 yards of those goods to weigh a pound. The advance has been 1 cents per yard on those goods; in fact, they did have them up a cent and a half, but they were so greedy they had to come back a little. A cent and a quarter a yard means an advance in the price per pound of 8 cents. You can easily figure 6.60 by a cent and a quarter. But let us be fair. It does not really mean quite that much, because in manufacturing cotton the average mill estimates waste at about 15 per cent. So you will take off 15 per cent, not of the price of cotton at 15 cents a pound, but 15 per cent on the difference between the price last year and this year. That mill is taking off a cent a pound and is getting a larger proportion of advance on that cloth than cotton has advanced. That does not apply to everything, but the average is mighty close to that.

Labor cuts a bigger figure in proportion to the value of many fabrics than the cotton itself, and in some instances so much that I know of mills making profits on cloths at the same price now as those cloths sold at last year with cotton 94 cents a pound. They have not advanced their prices one particle and still they are making money, because the item of labor cuts so much bigger figure in the cost of the goods than the cost of the cotton does. It is true that does not apply to many fabrics, but that applies to some, and, Mr. Chairman, in a general way that might answer your question you were asking yesterday as applied to wool and woolens. One of these gentlemen, Mr. Brooks, yesterday referred to putting cotton down 5 points and 5

points by a system of wash sales-I think it was Mr. Brooks. In reply to that I wish to state that cotton has its value, and the value of cotton under the law of supply and demand regulates the price, and the future does not regulate except temporarily. By the system Mr. Brooks mentioned a temporary decline might be forced, but would recoil with loss against the manipulator. I, for instance, would be one of those to take advantage of such manipulation. If they manipulated the price in New York to less than cotton was worth, I would telegraph my order up there for what little I could, and sometimes I have telegraphed, when I thought the price was lower in New York than it ought to be, for right smart quantities.

men.

To illustrate what can happen, in this break in cotton to below 14 cents a pound recently, I called up some of the mills with whom I stand close and advised them. I said, "Here, gentlemen, they have cotton too low in New York." I called up one mill president who I know has to buy a great deal of cotton out of this crop as yet. I said, "Here they have cotton in New York under 14 cents a pound. You know the farmers in the South will not sell it under 15. You believe, as I do, that we have a short crop. There is one thing certain, either cotton has to come down or the futures have to go up." I believe that the advance in cotton we have seen is legitimate; that it is a result of the law of supply and demand, and so did these mill I said, "If it comes to the worst, here they are selling you July cotton at the price of the spot month. In other words, the man who sells you those futures, Mr. S., will sell you and carry your cotton for you until July at the price of January cotton." He said "Buy me 1,500 bales." I telegraphed an order to one house for 1,000 and to another for 500, below 14 cents a pound. Here is what the man who sold him those futures did. He let him carry $120,000 worth of merchandise. He made him a present. He sold him that merchandise at the same price he bought July cotton that he would have bought January for. That man who sold him those futures, knowingly or unknowingly, did carry for him until this recent rise-which my mill man could not resist the profit of he would have carried for that mill man until July $120,000 worth of merchandise without charging him one cent of interest, as it were, and without charging him any insurance or storage charges. The interest at 6 per cent on $120,000 is $3,600, is it not? That is exactly what occurred. But it was but a few days when the market was to come back like the pendulum of a clock, and my mill friend could not resist his $6,000 profit, and he told me to let them go, although he made a mistake; it has gone higher since.

In my town there are about ten buyers for cotton; most of them buyers of small means. If you eliminated the exchanges they would, almost to a certainty, to my mind, gentlemen, be eliminated. If they tried to continue, they could only do it by offering some greater advantage than the big fellow would, and the result would be that some time there would come along some upheaval in the market they could not stand under, and to the board they would go. But the bigger man would have things, in my judgment, gentlemen, all his own way. As I say, the only big mill man I have seen here was in favor of this bill.

Mr. Chairman, you spoke yesterday of receiving 200 letters, only 200 letters, and here is an organization covering 29 States. It seems

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to me that if I were running that organization you would have received 200,000 letters or 2,000,000 letters. I hardly knew this thing was going on myself until I was advised by friends. It seemed really, when I heard of it, absurd.

One of the gentlemen yesterday-I believe it was Mr. Brooks— intimated that the dealers in cotton on the cotton exchange knew the way they were going to make the market go. Allow me to illustrate the impossibility of this. Some of you, doubtless, have heard of the San Francisco blacksmith who offered to shoe a horse, eight nails in each shoe, for 1 cent for the first nail and double the price each time to the last nail, and if you will just take pencil and paper you can figure the enormous number of millions of dollars that last nail cost. I think it is something like thirty some odd million. If you could tell me in one single day what the price of cotton was going to be in any market of the world, I would guarantee, if you told me what the fluctuations would be from one ten minutes to another, I could take a $100 bill and buy out John D. Rockefeller. That is not on any one day, but many days of the year. You see here a great number of New York Cotton Exchange men, all of whom I know by reputation, and some I have known personally for years. If any of them are very rich, I have not heard of it.

I want to say, gentlemen, in regard to this hedge business, that it is a thing that no man can know the exact proportion of what speculation represents as compared to actual dealings. I can give an illustration. One day 100 bales of cotton exchanged hands between five dealers in my town in less than two hours. I was the last man who bought that cotton. Every man made a profit on it, to the best of my knowledge and belief, and I shipped that cotton to a mill. I presume the other men had hedges, just like myself, on that hundred bales of cotton, if they handled it legitimately. I do not know what hedges existed on that hundred bales before it was brought up from Greensboro, because it came from Greensboro. But if each man handled that hundred bales legitimately, the chances are, unless it was in the case of the first man who handled it on a brokerage pure and simple, that cotton was unhedged that day four or five different times.

This hearing reminds me of some medieval history I have recently read relative to the house of Fugger, whom most of you gentlemen have doubtless read of or heard of or know about. This house became enormously rich four hundred years ago in Germany. In fact, they became the richest people in the world, and, if you could figure the purchasing power of money then as compared with now, I do not believe any fortune exists to-day that is equal in its power compared to that fortune. At that time this house became rich, first, through its interests in manufacturing textiles, and from that it got over into the mining industry, but it became so rich that it had to have an outlet for its money. The ecclesiastical courts of that day and the people of power and thought determined that it was against right and un-Christianlike to demand or require interest on returns, and there is much history about that. By referring back any of you can see those courts, by the ablest reasoners of the age, decided that it was unfair to demand or to require a single per cent for the use of a loan of money. This house, notwithstanding strenuous efforts to set that right aside through more than one convention, could not succeed.

After great debates that were held by these intelligent men they decided it was not right. Nevertheless, gentlemen, at that time it was right for land to bring a return, and it was right for property of any other sort; yet those men, those intelligent men, could not see that it was fair for money to bring a like return. You can easily figure to-day how that created a hardship on a lot of people, and I think this question itself bears a very strong resemblance to that, in looking at this matter from a broad point of view.

Mr. BEALL. What is your application of this story?

Mr. CONE. It is the idea, sir, to show that people oftentimes do not know what is best for themselves.

Mr. BEALL. That is, on the theory that the producers do not know, in this instance, what is best for themselves?

Mr. CONE. I believe they do not.

Mr. BEALL. And the independent speculator does?

Mr. CONE. No, sir; I do not say that the independent speculator does, either. I say that the man of broad thought, the man who cares for things above money and looks at the question from an absolutely impersonal point of view-for, gentlemen, I can retire from business to-day and travel around the world and live considerably easier on what I have, but I care for right more than I do for money.

Mr. BEALL. Do you think that gives you the impersonal view that the ordinary producer, the man who toils, has?

Mr. CONE. I am talking about this absolutely impersonally; yes, sir.

Mr. BEALL. I am perfectly content for you to look at it that way. Mr. CONE. Property in land could bring returns, but money which could buy property or lands should bear no interest. I guess a man had to have a mighty good moral standing in that time to raise a little loan at even some unknown usurious rate of interest, for the penalty was severe for charging even 1 per cent.

I may say, gentlemen, in regard to an experience Mr. Parker related yesterday-if I understood him correctly-that my experience with Mr. Theodore Price was quite the reverse of his. In that year I spoke of, the "great storm year," as it is known among cotton men, I oversold myself on low-grade cotton. I oversold myself on what was the lowest grade deliverable on the New York Cotton Exchange, "low middling stains." There was a lot of that cotton in the South when I first sold it. I sold a great deal, and when I got up to the end of my orders I found that I had oversold myself 200 bales. It is true it was only 200 bales, but I could not get it in the South anywhere. I tried all around. I went up to New York and saw Mr. Theodore Price in person. Mr. Price was glad to let me have that 200 bales of cotton, and actually broke 7,000 bales on contracts and selected that 200 bales of low middling stains for me and shipped it back South. Mr. BEALL. Let me ask you about Mr. Price. He is a member of the New York Cotton Exchange?

Mr. CONE. I do not think so.

Mr. BEALL. What exchange is he a member of?

Mr. CONE. To the best of my knowledge and belief, he is not a member of any exchange, but I do not know. Some of these gentlemen from New York could answer that, I guess.

Mr. SPRINGS. He is not a member of the New York Stock Exchange.

Mr. BEALL. Is that the Mr. Price who received some information from one Mr. Holmes, who was connected with the Department of Agriculture down here?

Mr. CONE. It is the great cotton Price, whose reputation is kind of bad among old Cotton Exchange people, I believe.

Mr. BEALL. Does that exclude him from the exchange?

Mr. CONE. I do not think many people up there want his business. I do not know. These gentlemen from New York could probably tell you.

The CHAIRMAN. I think it would be better not to pursue that inquiry. Before Mr. Beall came in, I may say for his information, Mr. Cone asked that he be not interrupted until he has finished his

statement.

Mr. BEALL. I beg your pardon; I did not know that.

Mr. CONE. Mr. Chairman, if you will pardon me, you asked Mr. Parker a very pertinent question yesterday-I think it was you; if it was not yourself, it was the gentleman, perhaps, at your side [Mr. Cocks] that if he wants a specific grade of cotton, why does he not go to the dealer for it? I was up in New York about the 10th of December, and they offered to break up contracts for me and put them on f. o. b. cars if I would pay them 25 cents a bale only, and ship that cotton south for me. They would give me the grades I wanted. I ship cotton from Mr. Parker's neighborhood to New York. To go up to New York and buy cotton is not a natural procedure. Mr. Parker wants to buy that cotton in New York. Why? Because he wants the best, and the grade of strict middling cotton, the average strict middling cotton, is a mighty high-grade contract. He wants the best at the price of the worst. A spot-cotton dealer like myself uses many grades of cotton. We have mills that will buy low middling stains; we have mills that will buy strict low middling tinges; we have mills that will buy any grade of cotton. Mr. Neville there, who is reputed to handle about $50,000,000 worth of cotton a year, can use any grade of cotton. He can take those contracts and split them up, and he can give Mr. Parker what he wants, and he can give me what I want, or he can give any mill what it wants; and, gentlemen, it is worth something to do that.

The trouble about lots of people is that they want the most desirable on as good a basis as the least desirable. Supply and demand govern the price of cotton and all products, and any attempt against this law can have but a temporary effect. That is the reason few corners are successful. The situation to carry through a corner successfully must be a remarkably short supply proportioned to the demand. I want to say to you gentlemen that if Mr. John D. Rockefeller, if the situation were against him, were to try to corner cotton, he could temporarily, doubtless, make a success of it, but what would be the result? This is a bad time to give an illustration, because right now we are facing a remarkably short supply and we are having more than a good demand, even in proportion to the supply. But you take, in an ordinary year, if Mr. John D. Rockefeller himself tried to corner cotton, here is what would happen: He could put the price of cotton up, but he would get the cotton, and when