Cotton market

“ While it secures to the United States forever almost the entire monopoly of production, it puts it in her power, by a judicious combination among her great producers, to command a fair compensating price for cotton. Without some such combination, or, which is equivalent to the same thing, a prevailing disposition on the part of the planters, rather to wait for a demand than to anticipate, or endeavor to create it, there will always be a surplus stock in the market, which, however insignificant, will affect the price of the whole crop. ”

“ This lien system goes far to account for the amazing fact a few years ago of the southern farmer's persistently planting a full acreage of cotton in the face of an already glutted market. Those who then berated him for his folly little understood his predicament. For the southern cotton farmer, cotton is the only money crop; but for it there is absolutely certain sale, for there exists from the field to the factory a market unexcelled for its thorough and sensitive organization in the commerce of the world. Government bonds can sooner fail of a purchaser than can a bale of cotton. ”

“ The close proximity of the provision and cotton-growing districts in the United States, gave its planters advantages over all other portions of the world. But they could not monopolize the markets, unless they could obtain a cheap supply of food and clothing for their negroes, and raise their cotton at such reduced prices as to undersell their rivals. A manufacturing population, with its mechanical coadjutors, in the midst of the provision-growers, on a scale such as the protective policy contemplated, it was conceived, would create a permanent market for their products, and enhance the price ”

“ The civilized world is dependent upon the Slave States of America for a supply of cotton. The demand for this commodity has, during many years, increased faster than the supply. Sales are made of it, now, to the amount of two hundred millions of dollars in a year, yet they have a vast area of soil suitable for its production which has never been broken. With an enormous income, then, upon a steadily rising market, they hold a vast idle capital yet to be employed. Such a monopoly under such circumstances must constitute those who possess it the richest and most powerful people on the earth. ”

“ At the outset, most conditions were favorable to large gains—there was little competition, labor was most plentiful and cheap, the lack [Pg 251] of advantageous marketing facilities was to some degree offset by purely local demand for the product, and the deficiencies of management tended to be neutralized by the presence of physical advantages which disappeared when a more advanced development increased the size of plants, widened the area from which raw cotton was drawn, and extended the market for product. ”

“ The supply being limited, those who grow cotton on the most productive soils, and with the greatest advantages in all other respects, not only can afford to pay more than others, for all the slaves which can be brought into market, but they are driven to a ruinous competition among themselves, and slaves thus get a fictitious value like stocks “in a corner.” The buyers indeed are often “cornered,” and it is only the rise which almost annually has occurred in the value of cotton that has hitherto saved them from general bankruptcy. ”

“ Already, under the increased consumption, one-third of the cotton consumed at Liverpool is the product of climes other than our own. Hundreds of miles of railroad in India are opening to the market vast regions to share in our profits and break down our monopoly. To-day, India, for home-consumption and exportation, produces twice the amount of cotton produced in America ”

“ The heaviest importation of cotton goods was in laces and such other things as are specialties of foreign manufacture, in many cases hereditary trades, or trades dependent upon cheap, trained female labor, such as is not available in America. America uses nearly 6,000,000 bales of home-grown cotton every year in her own factories, and supplies not only the home market with manufactured goods, but manufactures more than $30,000,000 worth for foreign sale, in competition with the great spinning and manufacturing countries of Europe. ”

“ It is employment, after all, that we are all in search of. It is a market for our labor and our produce, which we all want, and all contend for. 'Buy foreign goods, that we may import,' say the merchants: it will make a market for importations, and find employment for our ships. Buy English manufactures, say the cotton planters; England will take our cotton in exchange. Thus the merchant and the cotton planter fully appreciate the value of a market when they find their own encroached upon. The farmer and manufacturer claim to participate in the benefits of a market for their labor and produce ”

“ It is clear that the check must ultimately come from the consumer, for as long as a market exists for such cotton, so long will people be found to supply it. Whatever may be the result of the means adopted with a view to the suppression of this gigantic swindle, it cannot be denied that its perpetration is a strong argument against our remaining, longer than can be avoided, dependent upon one country for the largest supply of so important an article as cotton. ”

“ A certain amount of risk might be run by the Manchester manufacturers, and the impulse given to the production of cotton wool in India would recoil advantageously on those who imported it. The cultivators, speculating for the general good, would like to pre-arrange a remunerative price without reference to the vicissitudes of the home market, and be thus freed from that damping, deadening, paralysing condition which enjoins them to send their cotton some thousands of miles, and receive for it just what the prices ruling in the Liverpool market shall at the moment determine. ”

“ Cotton, he said, had not been higher for many years, and as a great many persons, especially young men, were moving off to the new purchase in Georgia, prime hands were in high demand, for the purpose of clearing the land in the new country—that the boys and girls, under twenty, would bring almost any price at present, in Columbia for the purpose of picking the growing crop of cotton, [Pg 46] which promised to be very heavy; and as most persons had planted more than their hands would be able to pick, young niggers, who would soon learn to pick cotton, were prime articles in the market. ”

“ The profit on cotton does not lie in the fluctuations of the market, one has to look for it elsewhere. The chances of profit-making are to be found for the merchant in judicious buying, while, for the manufacturer, they consist in the lucrative production of his finished articles. ”

“ At the Tayiba demonstration station, which is now being managed by the Sudan Plantations Syndicate on a commercial basis, the cotton yield was good and the quality of a high order. The working of the Tokar cotton area "has more than justified the policy of the Government. A marked improvement in the cultivation of the land and in the handling of cotton has taken place and consequently higher average yields and better prices have been obtained. The sale of cotton by public auction, after estimation by Government classifiers, has ensured a fair market price to the cultivators." ”

“ The cause of this extensive cultivation of cotton is not a high average yield per acre, but the fact that before 1860 “Cotton was King,” and that the market value of the staple when the Civil War closed was so high that farmers began to cultivate it to the exclusion of the cereals, whose production, Indian corn excepted, showed a decline during each decade from 1879 to 1899. But in the ’nineties the price of the cotton fell below the cost of production, owing to the enormous supply, and this was accompanied by economic depression. ”

“ If cotton can be sold in the Liverpool market at anything less than 43⁄4d. per lb., the slaveholders in America will cease to grow what, under altered circumstances, would be unprofitable. Cotton of middling quality (which is in the greatest demand) may be obtained in West and Eastern Africa at 4d. per lb.; and, already, cotton from Western Africa (Liberia) has been sent to Liverpool, there re-shipped, and sold at Boston, in the United States, at a less cost than cotton of a similar quality could be supplied from the Southern States of the Union. ”

“ Thus a fresh supply of cotton for our markets would be obtained, which, coming from an English colony, would give employment to British vessels alone, and the industry of our manufacturers would be called into operation by an entirely new market for cotton goods being thrown open to them, in which the demand for these articles is far greater than the supply could be for many years. ”

“ The cultivation of cotton, therefore, in the above-named countries is not new to the inhabitants; all that is required is to offer them a market for the sale of as much as they can cultivate, and by preventing the export of slaves from the seaboard render some security to life, freedom, property, and labor. ”

“ The endeavours of the cotton trade have always been directed towards the minimising of the market risk, and for this reason, "futures" have always played an important part in cotton business.
What are the forces which put life into the "future" market? The world's trade is large, and every minute will find people, who, in the pursuance of legitimate interests, buy or sell. When both groups are fairly equal, the market is steady, while a decline or an advance is caused by a preponderance of one over the other ”

“ In the Congo Free State, as thus opened to the trade of the world, is supplied a market in which American manufacturers should be able successfully to compete. There is a great demand for cotton goods, canned food, cutlery, lumber, and ready-built frame houses. Manchester has already monopolized the trade in cotton goods, which, in the further extension of trading posts, is capable of almost indefinite expansion. Birmingham and Sheffield supply brass wire, beads and cutlery, and England and France now supply the demand for canned foods. ”

“ Of great importance in the cotton trade is the business for future delivery, and that in a two-fold form. All transactions in "futures" are governed by the stringent rules of the respective Exchanges, which refer, particularly, to the price differences caused by the fluctuations in the market, and the safeguarding of the interests thus created. ”

“ On many plantations the cotton crop of 1862 was still in the field, somewhat damaged by the winter rains; but well worth gathering at the prices which then ruled the market. General Grant gave authority for the gathering of this cotton by any parties who were willing to take the contract. The contractors were required to feed the negroes and pay them for their labor. One-half the cotton went to the Government, the balance to the contractor. There was no lack of men to undertake the collection of abandoned cotton on these terms, as the enterprise could not fail to be exceedingly remunerative. ”

“ Here, in Bremen, first of all, the credit system had to be abolished. It was manifestly impossible to increase the import, as long as the importer was obliged to sell the cotton on 3-4 months open credit.
A good stock of cotton is the first necessity for a market of any importance, but how to obtain it, if the needful capital is lacking to pay for the cotton? The risk of the great price fluctuations, which are indigenous to cotton, gave the whole trade a bad name, and everybody, who had anything to do with it, lost prestige. ”

“ Southern men, therefore, could not conceive of any thing but ruin to themselves, by any considerable advance in duties on foreign imports. They understood the protective policy as contemplating the supply of our country with home manufactured articles to the exclusion of those of foreign countries. This would confine the planters, in the sale of their cotton, to the American market mainly, and leave them in the power of moneyed [79] corporations; which, possessing the ability, might control the prices of their staple, to the irreparable injury of the South. ”

“ It is a contest for a market between the cotton-grower and the merchant on the one side, and the farmer and the manufacturer on the other. That the manufacturer would furnish this market to the farmer, admits no doubt. The farmer should reciprocate the favor; and government is now called upon to render this market accessible to foreign fabrics for the mutual benefit of both. ”

“ The Bremen Cotton Exchange has never accepted this view, but has constantly fought against it, for very good reasons. The following explanation will make it clear, that, as far as cotton is concerned, the trading in futures is of great economic importance, and not practised for snatching easily earned profits.
HEDGES.
A great market has the duty to adapt itself to all the requirements of the Trade, and these are ever changing. ”

“ He only teaches what is true beyond all question: not that free labor is incapable of producing cotton, but that it does not produce it so as to affect the interests of slave labor; and that the American planter, therefore, still finds himself in the possession of the monopoly of the market for cotton, and unable to meet the demand made upon him for that staple, except by a [28] vast enlargement of its cultivation, requiring the employment of an increased amount of labor in its production. ”