Tanned Futures

U. S. consumption of cattle hides totals about 19,000,000 a year and the biggest individual buyer of them is the only woman buyer in the industry. She is short, blonde Sue Fitzgerald, who got her start as a stenographer in a tannery, now buys a million or more hides a year for International Shoe Co. Miss Fitzgerald, like most other representatives of big tanneries and shoe companies, does her buying in Chicago, centre of the packing industry of which cattle hides are a $100,000,000-a-year byproduct.

Speculative buying of hides, however, has centred in New York where nine years ago a market in hide futures was started for hedging operations. Last week, Chicago's Mercantile Exchange, eyeing New York's success, started a hide futures market too. At the end of the first day Chicago's new market had handled $79,000 worth of business, precisely half the New York total.

Chicago hopes to steal New York's thunder through a rule limiting futures trading to hides not more than one year old (the younger a hide is, the better most manufacturers like it). In New York, trading in five-year-old hides is permitted. Effect of Chicago's restrictions was evident in last week's prices. Sample: September hides in Chicago were 8.79-c- a lb., in New York 8.58-c-. These prices are only about half what hides were bringing last year, for consumption of tanned leather was off 25% in the first four months this year. Despite this obvious result of Depression II, the industry is in pretty fair shape statistically. With production cut 30% in the first four months of 1938, inventories of tanned hides are 5.6%, of raw hides a full 22% under a year ago.

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