Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1890-04-12
THE GAMBLERS KICK.
Representatives of The Brokers Fight
the ButterwOrth Bill.
FINANCIAL TROUBLE PREDICTED
II the Operations in Futures Are Stopped
by Congress.
TIE SENATE AND TIE WORLDS FAIR

hearing was held to-day by the House Com-
mittee on Agriculture on Mr.. Butterworth's S
bill to prevent dealings in options and
futures. There were present delegations
from the New York Produce and Cotton
Exchanges, the Chicago Board Of Trade,
ana the New Orleans Cotton Exchange, all
OF them to protest against the passage Of
the bill, which has already been recon-
mended by the committee.
Murray Nelson, one of the Commissioners
OF Cook county, Ill. was the first speaker
representing the Chicago Board of Trade.
Mr.. Nelson said that the Chicago Board of
Trade, and all exchanges In the country,
were in sympathy with the objects OF the
bill as expressed in the first section-to
abolish trading in privileges ('puts and
calls'') and bucket shop dealings. But to
enforce the provisions against trades made
Tor future delivery of the goods would be to
force out of business small dealers and con-
centrate the trade in the hands of large cap
Italists who could afford and were able to
purchase crops and hold them for rise.
A DISASTER PREDICTED.
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 system OF the country. The
bankers of the country move its crops and
depend upon the transactions of small deal
ers in country towns for the basis OF their
transactions. He proceeded to explain in
detail the operation by which the grain
reached the market from the producer, in
which operation the farmer, the local agent
the broker in the money center and the
banker were all engaged.
Mr.. Nelson repeated that the result of the
bill would be to crush out the small dealers
and place the farmer at the mercy of the
large capitalist. who can buy cash grain;
but they will buy at such price that they
can hold it until Gabriel blows his horn
without sustaining loss. In answer to
question BY Mr.. Allen, of Michigan, Mr..
Nelson said that local banks could not sup
ply and could not get sufficient money to
move the crops of the country, nor could
the local dealer or agent 1t must be sup
piled from the money centers.
A PERTINENT QUESTION.
Referring to the taxing section, Mr.. Mel
son asked why, if the committee believed
the business to be honest, license was re-
quired? Certainly not for the revenue to
be derived. If the business is to be made
penal offense, why not say so in the first in
stance, and declare it unlawful in SO many
words?
George c. Martin, of the New York Prod
uce Exchange, spoke against the bill. He
said that the farmer never before received
so great per cent of the value of his crops as
now. Twenty years ago the cost of trans
porting bushel of wheat from Chicago to
New York by lake and canal was 1917
cents; now the rate is 9-10 cents. 1t may
be asked, continued Mr.. Martin, why are
prices now so low, why commissions so re-
duced, freights reduced, and the export
trade the largest ever known?
CROPS TOO LARGE.
In his opinion it was because of the recent
series of large crops from which had been
accumulated in store 200 900, 600 bushels of
corn more than ever before in the history of
the country. The merchant has suffered
losses along with the farmer. In 1875 the
commissions on a bushel of corn amounted
to 2% cents; now the entire crop of the
country was marketed on a commission Of
Il cent. If the bill passes Mr.. Martin said
that three-quarters of the export trade of the
country would be prescribed.
J. o. Bloss, of the New York Cotton Ex-
change, read an argument against the pass
age of the bill prepared by q committee of
that exchange, prefacing it with a protest
against the bill signed BY the leading bank
ers of New York, in which they state that
the passage of the bill would work great
damage to legitimate trade, and that the
banks find their risks of advance under the
present system of business less than under
the old. From the argument of the COM
mittee the following extract is made:
NOT so VIOLENT.
The effect of the trading for future delivery
has been to give the markets of the world a
less violent character: have reduced the risks
of merchants and bankers, and at the same
time have secured to the planters of cotton a
higher range of values than was the case be-
fore the existence of the method of trading for
future delivery. No legislation has yet been
able TO regulate values of anything, and as
striking illustration of this fact NAV be cited
the law which was passed by Congress to pro.
hibit public trading in gold. The effect of that
legislation had for the purpose of reducing
the premium on gold. was to advance the price
from 81 20 to 81 s.. The repeal of the law re-
suited in the immediate decline of the price to
that from which it started.
Mr.. Bloss was followed by J. W.
Labouisse, who with General j. j. Hazard,
OF Rhode Island, and L. F. Berje reore-
sented the New Orleans Cotton Exchange.
He stated that he fully Endorsed Mr. Bloss'
statements, and continued the argument that
the system of contracts for future delivery
had greatly reduced the fluctuations in the
price of cotton. In proof of this he referred
to the conditions surrounding the cotton
crop of 1889. That was the largest one ever
raised in the United States-7, 500, 900 bales.
Yet the fuetuation in prices amounted to
only ~ cents pound, and '95 per cent of
the crop has been already moved.
MONEY FOR THE PLANTERS.
The lowest price touched-9% cents-was
in October, and Mr.. Labouisse expressed
the opinion that had it not been Tor the
system OF contracts for future delivery. the |
planter would have been compelled to take |
a cent less at that time Upou the Question |
of speculation Mr.. Labouisse said that if
the future contract system was wiped out
the exchanges of New York and New Or |
leans would cease to exist. There are but |
five exchanges in the world where cotton |
futures are dealt in-Liverpool, New |
York, New Orleans, Bremen and Hayre |
To close out New York and New Orleans |
would be to transfer the business to Europe |
ana build up the exchange there The |
business will go, he said, cotton will be |
raised and sold, and if our merchants and |
dealers are not allowed to buy and sell the |
dealers in Europe will do so.
In the course of his remarks. Mr..
Labouisse asserted that, owing to the peculiar |
conditions and necessities of the cotton |
trade, the producer could not sell directly |
TO the consumer, even if he wanted to, be- |
cause he cannot tell what grade his cotton |
will be when gathered. He was illustrating |
the modus operandi of trading by case in |
his own experience. where he had sold to |
the agent OF Havre broker for French |
cotton mill. large number of bales of |
cotton.
JUST THAT KIND.
"was the cotton in existence at the time |
the trade was made?" asked Chairman |
Funston.
sit was not. I"