[JEROME HILL, aged 52, resident of St. Louis, and a cotton factor for twenty-five years.]

Attributes the low price of cotton to three causes, mainly:

1. Financial troubles of the world growing out of the failure of the Barings, which upset commercial values and caused a scarcity of money for the moving of the crop, interest being so high-10 to 12 per cent in the cotton States-as to force the producer to sell.

2. The Lancashire strike, whereby the demand for cotton was greatly lessened. 3. Future dealings on the exchanges of New York and New Orleans, which he termed illegitimate and injurious to the producer.

Does not think there has been any overproduction. Thinks cotton can not be grown with profit at less than 8 or 9 cents a pound. Sees no benefit to the cotton producer from future dealings, and says they give advantages to foreign nations by enabling them to purchase the product at a lower figure than under the old system. Explains his reasons for this opinion as follows: "It takes $4,000 to buy 100 bales of spot cotton. It takes a margin of from $100 to $200 to sell 100 bales of future cotton. Hence, a man to be a bull on cotton is compelled to prepare to carry the spot cotton of the country, while a man to be a bear has only to prepare to carry a margin of, say, from $1 to $2 per bale upon his deals."

Denies that the enormous sales on the exchanges are for hedging purposes as claimed, and asserts that not over one tenth are for that purpose, the balance being simply gaming transactions. "No consumer of cotton ever consumes what he buys on a contract in New York or New Orleans," because on such contracts he can not tell what grade of cotton he will get. Hence futures do not sustain the price of spots; for they "are sold down and not up."

Believes the South has lost $100,000,000 in 10 years through futures. Quotations show price of cotton contracts lower than of spots; hence purchasers would buy futures, and this would depress spots. Thinks in future sales the grade of cotton should be specifically defined, as is done in sales of spots.

Thinks some sort of financial legislation necessary so as to make and have an "elastic currency" for the whole country which could be utilized somewhat after the manner of the clearing-house certificates issued in New York during the panic of 1893 for the banks.

[D. C. BALL, aged 36, resident of St. Louis, a cotton factor for 14 years.]

Believes the low price of cotton principally due to overproduction, in a qualified sense, the financial troubles in the cotton-consuming portions of the world having lessened the demand for the raw product, so that the normal consumption did not obtain. Influence of speculation also depressed the market in advance of actual conditions, and beyond what would have been the price without it.

The remedy for the cotton producer to pursue is to raise all the articles that a farm produces which are required upon the farm, so far as climatic and other conditions will permit. Cotton planter can not hold his own against the speculator. South has lost a large amount of money by holding cotton for higher prices. Southerners are naturally bulls on cotton and hold for higher prices, forgetting that the speculator has already possessed himself of all the facts in the case, and is fully prepared to meet them.

Thinks the underlying principle of the future dealings is an absolute necessity for the handling of cotton. In practice, however, abuses have crept in.__ Their proper sphere is to serve as an actual outlet for the handling of the crop. Beyond that is evil. Without futures the handling of the crop in the few months in which it is brought to market would involve the rankest speculation or else a return to the primitive methods that prevailed before the agencies of electricity and steam had wrought their grand results, which latter plan would be very detrimental. Futures are used for legitimate hedging for the protection of the actual buyer of spots. An immense amount of manipulation is practiced by purely the speculative element on the exchanges, generally to the detriment of the producers and to all other interests save the temporary interest of the speculator.

The consumption of the cotton crop of the United States is proportioned substantially as follows: United States and Canada, 25 per cent; Great Britain, 36 per cent; and the Continent, 38 per cent. Exports direct to Great Britain are in excess of her consumption, and to the Contiennt are less, the former exporting a portion to the latter. Greater part of exports to Great Britain handled by and through future contracts procured mainly in Liverpool. Can not state as to the exports to the Continent.

The necessary basis of futures is, that futures for any month are lower than for the previous month, the difference being to cover the expense of carrying actual cotton, against which the futures are sold.

The amount of futures chargeable to legitimate indemnities is relatively small when compared with the total amount, probably from 10 to 25 per cent. The outside public, especially the South, being bulls, the speculators on the exchanges are naturally bears, and their influence is necessarily used to depress prices. Futures of that purely speculative sort thus work an injury to the producer. Doing away with futures would throw the entire handling of the whole crop upon the actual handlers of cotton, and the enormous supply coming into the market at harvest time would depress the price. Spinners would have to buy their entire year's supply at once or have the risk of paying higher prices, for the remnant of cotton would be bought up by speculative combines, which could easily be done, for it would be known just what cotton was held outside of the mills, and what the requirements of the mills would be. If the mills bought, they would have to invest an enormous amount of capital, and they would make no contracts in advance for their goods until they had secured their supply of cotton. If the mills had a reasonable supply and would purchase nothing, the producer and his agents would have to carry the cotton, with no outlet, and would finally have to take whatever price the mill owners would agree upon. The exchange represents the meeting place of the buyer and seller, of the producer and consumer, and its basis is to facilitate the exchange of the commodity between these two masses. Exchanges and future dealings enable the small investor to transact business, and combinations of large amounts of capital to control the entire crop are prevented.

Dealing in futures has become so essentially a part of the actual handling of cotton that doing away with it would thoroughly demoralize the cotton business of the country, because it would mean an absolute speculation on the part of the handlers of cotton from the time it was ready to be marketed up to the time when the mills had sufficient stock on hand to cover their actual sales of manufactured cloth. Thinks the demoralization referred to would eventually be overcome, but that combinations and trusts to control the price absolutely would be the outcome.

Up to 1860 the United States was practically the only cotton-producing country of the world; since then other countries have become competitors, and that accounts in a measure for the difference in the condition of the planter then and now, if the abuses incident to speculation in futures could be removed it would be a blessing, but does not think it possible to enact a law that would effectuate that purpose, as it could not be enforced. Future dealings give the power which is often exercised to unduly raise or depress the market; and the exchanges fix the price of actual cotton when sold.

[JULIUS LESSER, a resident of St. Louis, in cotton business for 15 years, handling principally Arkansas cotton ]

Thinks the low price of cotton caused principally by overproduction; also poor trade in England and the strike in the mills there. The remedy for low prices is that farmers plant less cotton. Thinks the condition of the planters somewhat improved over former years. Speculation at times will influence the price of cotton, but the producer, in the long run, will share in the profits as well as the consumer. In buying for spinners, futures in New York and New Orleans are necessary for the transaction of the business, for the reason that the large mills buy their supply from 1 to 4 months ahead, not as a matter of speculation, but they sell their goods against it, to be delivered for those months for which they contract in the raw cotton. Must go to the future boards, in such transactions, for prices. These transactions beneficial to the producer because without them there would be no regular market every day, as there is now, for the raw product, but cotton would accumulate in the small towns in the South until it would become such a load that the largest part of it would have to be consigned to large bankers or cotton factors to be stored, at a great expense, and cause a loss to the people. Futures not for protection are pure gambling and are an evil like any other gambling. Thinks the business would be more satisfactory if the exchanges would not allow a future delivery below a certain grade, say low middling. The reason of the ru.es of the exchanges on this point as given by them is that only by permitting any and all grades to be delivered, is it possible to dispose of the inferior graues of cotton. Futures so interlocked with the business of marketing real cotton that their prohibition would disorganize the cotton trade, and eventually we would be at the mercy of foreign traders. In his own business never delivered actual cotton dealt in on the exchanges and never had it delivered to him; always closed his trades as soon as he was fully protected in buying spots. Did not expect to tender or receive cotton. Knows of one instance of delivery of actual cotton on future contracts.

[L. L. PRINCE, aged 45; engaged in cotton business since 1867.]

Low price of cotton caused by overproduction and disturbance in the cotton trade in England due to unstable financial conditions.

Speculation in any article sustains it, and therefore dealings in cotton futures are beneficial to the producer. High tariff on cotton goods is injurious to cotton trade. With free trade with South America cotton industry would be greatly benefited. Free coinage of silver would not, except perhaps temporarily, advance the price of cotton, and afterwards would demoralize the market by driving go d out of the country. Does not think future dealings in cotton have much influence either way on the price of cotton, excepting to maintain the stability of it-neither so low nor so high, perhaps, as without futures-but more regular price.

[JAMES H. ALLEN, resident of St. Louis, engaged in cotton business nearly 30 years.] Overproduction is one serious cause of the low price of cotton; another cause is future dealings. Futures are the great factor in unsettling prices. The great majority of futures are nothing more than gambling transactions, carried on by those who have no interest in spot cotton. They control prices to suit themselves, putting them either up or down at their own pleasure and for their own interest. In some respects there is an advantage resulting from future dealing; as, for instance, by large planters who sell for fall delivery in a legitimate way, and by manufacturing establishments when they have not money to buy their fall stock and supply of cotton, and when their goods are sold ahead. Not one-fiftieth of the futures are legitimate. Future gamblers often sell cotton ahead for future months at a price much lower than the spot price at the time, and then use all their power of manipulation to make those sales yield a profit. This depresses spot cotton and destroys the market for it. It is only when the market is cornered that there is any considerable amount delivered on future contracts. Future dealers never expect a delivery. The legitimate future buyers, as the mills, for instance, only do so as a protection or for indemnity purposes. Gambling on boards of trade is one of the greatest evils and curses to this country, and is constantly growing and ought to be suppressed by legislation or it will ruin the legitimate business.

[C. F. WOLFENDEN, aged 31, resident of St. Louis, engaged in cotton business for thirteen years; at present the representative of an English house.]

Knows nothing about future dealings in New York and New Orleans. In Liverpool any grade of cotton may be delivered, and allowances are made according to the commercial value of the cotton tendered. No record of future contracts kept in Liverpool.

Speaking from an importer's standpoint, futures are absolutely necessary, all business in cotton being conducted on that basis. For instance, if we buy 1,000 bales to-day we will sell 1,000 bales of futures to-morrow in Liverpool. When that cotton arrives over there and is sold, we buy back our futures.'

Spot prices are fixed by the daily demand for cotton from spinners. Competition fixes the price. Hard to say what fixes the price for futures. Thinks the legitimate future business in Liverpool exceeds the gambling business. Futures may temporarily affect prices, but in the long run prices are regulated by supply and demand. Where future dealings are connected with actual transactions in real cotton it is a charge upon the cotton, though very small; when not so connected it is merely a question of brokerage between the parties, and is no charge whatever upon the cotton.

[R. F. PHILLIPS, aged 44, resident of St. Louis, engaged in cotton business for twenty four years, executing orders for spinners and others, generally buying for England, but occasionally for Eastern mills.1

The low price of cotton is due, first, to overproduction; second, to competition from other countries, Egypt and Russia, for example, that formerly did not produce any cotton; third, the recent strike in the spinning districts in England; and fourth, the financial panic in this country.

Has no business with either New York or New Orleans, and never had. One reason spot cotton is generally higher than futures is that on such deals one knows what he is going to get, while in futures any grade may be delivered. New York futures are practically useless for the spinner. The Liverpool contract is useful to the consumer, because they know within a grade what they are going to get. Uses Liverpool futures to sell when he gets more spot cotton than he has orders for. That is the extent of his personal experience in futures. Very often a spinner will want to protect himself against sales of yarns or goods for some

months ahead, and he will either do so by buying the cotton for weekly or monthly delivery from some one engaged in the trade, or by a purchase of futures to the extent or partial extent so as not to take the whole risk of the market. Spinners in England try to buy the cotton that suits their wants, and if they can not do so they use futures as an indemnity.

Purely gambling in futures temporarily disorganizes values, either by enhancing the price or by depressing it, and is no benefit to the cotton trade.

[EDWARD BAKER, a cotton buyer for export exclusively, engaged in the business between thirteen and fourteen years.]

The causes of the low price of cotton are overproduction, the Lancashire strike, and the poor trade in foreign countries to which England sells her manufactured products. The main purpose of futures in Liverpool is entirely as an insurance or as an indemnity. Some gambling there, too, but that is true of all large markets.

In reply to the question, "Are future dealings useful or beneficial, when entirely disconnected with any real transfer of cotton, but solely as wagers on the future price of cotton?" he answered: Every seller has a buyer, every buyer has a seller, and if 4,000 bales sold during the day should depress the market, I don't see why 4,000 bought should not at least keep things on a par.'

MEMPHIS, TENN., November 15, 16, 17, 1893.

[SILAS WADE HAMPTON, aged 55, resident of Memphis, Tenn., thirteen years; been engaged in the cotton business up until the last eighteen months, ever since the war, in St. Louis, Cincinnati, and Memphis.]

Cotton market satisfactory up to 10 years ago. Since then great shrinkage of values, due, he believes, to the future business almost wholly, which has sprung up in that last period. Overproduction necessarily lowers prices, but the law of supply and demand has little to do in regulating cotton prices. Future business was legitimate in the beginning of it, but as it developed it became a means whereby the men in New York, or at headquarters, could regulate prices at their pleasure, although New York is a poor market for spot cotton. It is the recognized head of the future business. There are, perhaps, twenty powerful firms in New York engaged in the business, probably not banded together by any special contract, but their interests are identical and they form what is known throughout the country generally as the syndicate or the ring. Many of them are connected with banks and all have unlimited financial backing. They can thus buy or sell any quantity that may be offered and can make the quotations as they choose, doing the business generally through brokers.

Related numerous instances in which, from conditions existing in the South, the people of that section of the country conceived that cotton ought to advance in price, and they accordingly bought futures very extensively; but it did not advance, but declined instead, and the South lost very heavily, as nearly every one who could raise $100 or so was dealing in futures. Asserted that the conditions referred to naturally demanded an advance, but the New York syndicate forced the price down by manipulations of the market, thereby making millions of dollars out of the Southern speculators whom they had entrapped. His theory is that the whole cotton exchange of New York is composed of bears" or short sellers," whose interests all lie in depressing the price of cotton. Defines a "wash sale" as a collusion bid between two parties where no actual contract is made, but fictitious sales to influence the market. Has never been connected with any of the exchanges, or been on any one of them, and his information concerning them has been obtained from others.

The law of trade is "wherever the demand is greatest and the supply is least, there the best prices should prevail; where the demand is least and the supply greatest. there the lowest prices should prevail." Futures destroy this law. Quoted from an article by Mr. W. E. Bear, of London, in the London Economic Journal, republished in Review of Reviews, in support of all his statements. Says England adopted the system from America and that if America should suppress the system it would soon cease to exist in Europe.

Characterizes the assertion that the low price of cotton is chiefly due to overproduction as "a lie the New York fellows have been publishing to the world," and argued that futures made the visible supply of cotton left over from year to year appear much larger than it really was by decreasing the amount in the hands of the spinners, which is called the invisible supply, and increasing it in the hands of the dealers, that being known as the visible supply, the actual amount of cotton left over being practically the same from year to year. Futures require

less money than spots, consequently speculation in spots has greatly declined, nearly all of the speculation in cotton now being in futures. The result is that spot cotton, which would otherwise be in the market, remains in the hands of the merchants as the visible supply, and to that extent tends to depress prices. Futures on any given day are nearly always lower than spots, and that tends also to depress the price. Any one of 32 different grades may be delivered on a future contract on the New York Exchange, and this has a depressing effect. The rules of the exchange permitting such kind of a delivery were framed to discourage deliveries. The price of spots is governed by the price of futures. The effect of futures has been to completely demoralize and derange the legitimate trade in cotton, and to injure not only the dealer in real cotton, but the producer; and their object is to benefit those who control the system. Futures narrow the market for real cotton. There is in New York a small stock of lowgrade cotton used for delivery when delivery is demanded, but it is so poor in quality that it is known no one will accept it, and hence deliveries are prevented. Defines a future as a "so-called trade by which one man agrees to deliver to another a certain amount of cotton, grain, or other product at some future date at a given price and of a given grade;" but says in cotton any one of 32 grades may be delivered, and that the only option feature connected with the transaction described is that the seller has the option of delivering the cotton on any day during the month of delivery by giving five days' notice. Says "puts" and "calls" are options, and explains them as follows: In a "put” one party pays another a sum of money for the right to offer him a trade, the other party binding himself to take it. In a "call" the party pays another for the privilege of requiring the second party to deliver to him a certain article at a certain price on a certain date. The "margin" is the amount put up by the buyer as a guaranty. Asserts that futures are for the benefit of spinners. Annual consumption of American cotton amounts to 8.250,000 bales. Thinks consumption will exceed the crop, and that were it not for futures the price would be from 2 to 4 cents higher than it is. The great crop of 9,000,000 bales in 1891-92 was only 5 per cent more than the preceding year, and yet prices declined about 33 per cent, while cotton goods advanced about 20 per cent. About 1,000,000 bales less carried by spinners at that time than had been carried for years, and because of the reluctance of spinners to invest in real cotton and the existence of futures for speculation, a very large amount of cotton was left in the hands of merchants as a dead weight on the market. At least two-thirds of the decline in prices were due to futures, the remaining one-third to excess of production. The majority of those dealing in futures in and around Memphis have been ruined financially, and the business there is regarded as gambling, pure and simple.

Selling for future delivery of products owned, controlled, or in the possession of the seller is legitimate; but other future sales (which amount to 99 per cent of all of such transactions) are illegitimate, and they manipulate prices at the pleasure of the dealers. Cited instances of the decline which he asserted were not warranted from the conditions then prevailing and of fluctuations in the market attributable to futures wholly, whereby country dealers and speculators lost very heavily. New York future ring" absolute master of the situation at all times. Producers naturally buy believing prices should go higher and the "ring" thus become "short sellers," and being more powerful reap immense profits. Futures make an irregular market and work great disaster in our national financial system. Foreign markets are disposed to maintain prices, while New York and Chicago continually pound them down-a strange phenomenon, when the interests of this country demand the reverse. While cotton is low in price the cotton mills report net earnings greater than ever, and futures thus aid the mills at the expense of the planters.

¡DENNIS SMITH, aged 51; cotton buyer in Memphis for twenty-six years.]

Makes the following statement as to the causes of the low price of cotton: "I think there are causes which affect it now which did not affect it 2 years ago. The crop of 1890 left a large surplus, which threatened to put prices down. The crop of 1891 was a larger one and left still a larger surplus (that is, cotton in sight) at the end of the season. Last year's crop, the crop of 1892, was a short crop, still the surplus added to it made more than they wanted, especially as there was a strike in England which curtailed it more than 500,000 or 600,000 bales. This present year, which looks like it is going to be a moderately small crop, there was on the 1st of September about 1,750,000 bales of American cotton, which, added to the moderate crop we may have this year, will still leave a surplus, but probably a reduced one; and at the present time it is affected by this amount of cotton, in my judgment, and the unsatisfactory condition of the cotton-spinning business