The morning news. [volume] (Savannah, Ga.) 1887-1900, 1890-04-12
BUCKET SHOP BUSINESS.
BUrraRwoRTH's RAP AT THE
EVIL MEETS WITH OPPOSITION.

DELEGATIONS FROM OnS Now 4OrE FRO
duce and Cotton Exchanges, Chicago
Board Of Trade and New Orleans
cotton Exchange Before the House
Committee.
WASHINGTON, April 1l.-An interesting
hearing was had this morning by the House
committee on agriculture upon Mr.. Butter
worth's bill to prevent dealing in options
and futures. Delegations were present
from the New York produce and cotton
exchanges, the Chicago board of trade, aud
New Orleans cotton exchange. all to protest
against the passage of the bill, which has
already been recommended by the COM
mittee.
Murray Nelson, one of the commissioners
of Cook county, was the first speaker, rep
resenting the Chicago Board of Trade. Mr.
Nelson said that the Chicago Board of
Trade and all the exchanges in the country
were in sympathy with the objects of the
bill as expressed in the first section: To
abolish trading in privileges c'puts and
calls'1 and bucket shop dealings.
WOULD CREATE MONOPOLY.
But to enforce the provisions against
trades made for future delivery of goods
would be to force out of the business small
of large capitalists who could afford and
were able to purchase crops and hold them
for rise. These small dealers act largely
as agents for the farmer and buyer both.
To stop sales for future delivery, Mr.. Nelson
said, would be to interrupt and disarrange
the entire financial sytem of the country
The bankers of the country move its crops
and depend upon transactions of small
dealers in the country towns for the basis
of their transactions. He proposed to ex-
plain in detail the operation by which grain
reached the market from the producer
in which operation the farmer, local agent,
broker in the money centers and banker
were all engaged. Mr.. Nelson repeated
that the result of the bill would be to crush
out small dealers and place the farmer at
the mercy of the large capitalist who can
buy cash grain, but they will buy at such q
price that they can hold it until Gabriel
blows his horn without sustaining loss.
LOCAL BANKS PowERLEss.
In answer to question by Mr.. Allen of
Michigan Mr.. Nelson said that the local
banks could not supply and could not get
sufficient money to move the crops of the
country, nor could the local dealer or
agent 1t must be supplied from the money
centers.
Referring to the taxing sections, Mr..
Nelson asked why, if the committee believed
the business to be honest, license was re-
quired?
Certainly not for the revenue to be de-
rived. If the business was TO be made
penal offense why not say SO in the first
instance and declare it unlawful in so many
words?
George C. Martin Of the New York pro-
duce exchange was the next speaker. He
followed upon the same lines as Mr.. Nelson
and further elaborated his argument.
BANKERS PROTEST.
j. O. Bloss of the New York cotton ex-
change read an argument against the pas
sage of the bill prepared by the committee
OF that exchange, prefacing it with nro-
test against the bill signed by the leading
bankers of New York, in which they state
that the passage of the bill would do great
damage to legitimate trade, and that banks
ind their risks of advances under the pres
ent system less than under the old The
argument of the committee stated that no
exchange or board of trade recognized
options except to prohibit dealing in them.
Futures were term much misunderstood.
They were not simply ''bet" upon the
price OF an article at future time. They
were actual, legitimate contracts for goods
that could be enforced, and that were en-
forced. That there was an element of
speculation in them was not denied, Just as
there is speculation in every business.
CHOICE BETWEEN GOOD AND BAD
but the question arises whether because
there is some evil, A." continues the argument,
"a great deal of good should be utterly
destroyed. The two things are so welded
together that one cannot be DESTROYED with
out destroying the other. Having, there
lore, conceded that speculation does exist,
and at the same time asserting that legiti-
mate features of business also exist to an
enormous extent, the questions come to be
whether the evil is so great that the good
snail be sacrificed, or whether the good
SO far preponderateS that the evil
shall be borne with. The evident object of
the bill is to benefit the farmer, SAYS the
argument, on the theory that trading in
future contracts tends to reduce the price
of his products. What the causes are that
operate to make prices it would be certainly
brave man that would undertake to abso-
lutely define. The past, however. NAV
afford an interesting basis for arriving at q
conclusion.
FLUCTUATIONS In COTTON.
Between the years 1926 and 1860 the
widest fluctuation in the price of middling
cotton in New York was 10 cents a pound
in any one year, the narrowest / cent, and
the average annual fiuctuaeion 5 cents In
the period from 1874 to 1890 tho widest
huctuation In any one year was ~ cents
per pound, the narrowest three-quarters of
cent, and the average 21S cents. The
period from 1874 to 1890 covers the time
that trading in future contracts has been in
vogue. If these statistics show anything,
says the argument, ''they show that the
effect of trading for future delivery has
been to give the markets of the world
less violent character, have reduced the
risks Of merchants and bankers, and at the
same time have secured to planters of cot
Ton higher range of values than was the
case before the existence of the method of
trading for future delivery. As an illustra-
tion OF this statement il may be mentioned
mat In the first period referred 10 in four
years the price of middliDg i'll New York
eecilned to 5 cents per pound, and in two
pound
SHOWING OF THE SECOND PERIOD.
IN the second period mentioned during
S%nlcn the system of contracts for future
ueuVeFy has been in operation, the lowest
RIIce touched for middling cotton in New
, nork was 1916 cents, and that was
ppanIc ppIc year caused by the failure of the
; nank OF Glasgow. Ia conclusion, it is the
Oplllion OF the committee offering this argu-
- +t4iono, that no legislature has yet been able
81 FeguIate the values of anything, and as a
og o:Flking illustration of this fact may be
,,e1u., r,.eu tne law which passed by congress to
PanonIplG public trading in gold The