It sounds as though you are aware of a potential problem called bacterial wetwood. In the case of that disease, however, you would normally notice an unpleasant odor coming from the seepage. Evidently your cottonwood just has a wound that is not sealing itself off properly. Exposure of such wounds to sun and wind are the best thing to get them to seal themselves. Is there any loose bark around the wound? If so, trim it back to where it is firmly attached to the tree. Then let nature do it's work in compartmentalizing the wound.
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