TO PREVENT SALE OF COTTON AND GRAIN IN FUTURE MARKETS 109
Senator HEFLIN. If a man sold a contract, and instead of the mar-
et going down, as he expected, he saw a bull movement, he would
shift and get on the bull side; is that it?
Mr. BUTLER. He might do that, or he might simply buy in his
contract and establish his loss. He would have the option. If a
man sells a contract and finds he has made a mistake, the natura
hing for him to do would be to buy it back; and if he felt that he
was thoroughly wrong, he might buy it and then take the other side.
That is simply a matter of discretion and option with him entirely.
I just want to add one statement. A question was asked Mr.
Neale in regard to the delivery date terminating on the 10th of the
onth. I want to say, in regard to the New Orleans market, that
e have not found the necessity of doing so. You can deliver in
ew Orleans up to the end of the month.
Senator RANSDELL. As you view the situation, Mr. Butler, the
apacity to deal in futures increases largely the number of buyers
nd thereby gives a better price to the producer, does it?
Mr. BUTLER. I think a great many men who have made a thorough
tudy of the subject, including a former Senate committee, in the
investigations which took place at the time of the Smith-Lever law,
more than confirm that belief. I do, indeed, believe so.
Senator RANSDELL. What is the general law of economics in re-
ard to that question? Are commodities enhanced or depressed in
alue when there are a number of dealings in those commodities, be
hey land or anything else?
Mr. BUTLER. My experience of 26 years as a merchant in selling
otton has been that the greater the demand, the better the price,
but, of course, the demand is created by the number of buyers.
Senator RANSDELL. Is it perfectly clear in your mind that deal
ing in futures enables a great many men of small means to buy and
sell cotton, who otherwise would be absolutely deterred from so doing
because they could not get money?
Mr. BUTLER. I am convinced that with the risks involved in
he cotton business, the two elementary risks, that is, the quantit
f cotton yearly grown and the amount of the world consumption
eing so problematical, the business would restrict itself into four
I five large trusts, and that the small man would be entirely elimi-
nated, and he would be unable to assume the risks of the fluctuations
f the market.
Senator RANSDELL. Would there be anythink like uniformity ofl
prices that the cotton grower for instance, of Texas and of Georgia
ould get for his cotton unless there were a market and daily quota-
ions so that the Texas grower and the Georgia grower would kno
exactly what that cotton was worth? Would not the Texas man sel
otton of exactly the same quality as the Georgia man at prices
ery dissimilar?
Mr. BUTLER. We had an experience of that kind at the inception
f the World War. Cotton in New Orleans sold at as much as half s
cent a pound difference, and in adjacent towns there was a cent s
pound difference. Cotton would be placed on the same basis as other
commodities. It would be like jewelry, for instances, in our big
stores. It is sold on reputation and name to a great extent. A dia-
mond will command a certain price in one jewelry shop, and nex
