The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1898-03-13


recently agatnst The pr6Stlcx * Sl(HS i7
futures, and ID instances thin tb11x(l2 &XS
Non has gone 40 far u u ettffhutt ilx
present low price Of cotton n large oGlS
70 the operations Of exchange spscullto5S
markets. In view Of the prcvaienca 81
this feeling several representative coft62
merchants Of this city wcre Sonyersed NM
yesterday In orier TO obtain fair nfeseya-
lures. A. =
Henry Iients, former president 81 ths
New York Cotton Exchange and 4 icadlng
member OF the cotton trade q this city.
when questioned said II am rather our-
prlscd that a United States circuit court
should render such decision Ia view o.
the decision OF the United States supreme
court ~ 1922. r the case OF BenajAh u.
btbb, plaintiff In error. vs., Richard II 4.
Allen \ Co. Of this city. brought 10 rs.
cover some 100000 In commissions ana sd
vancos on operation In future delivery
cotton. Among the contentious set up ~
the plaintin was tho claim that tho tram
sactions were gambling contracts within
the New York stAtutos, and therefore In
valid under the statute OF frauds. a
MT, Justice jackson IN delivering the
opinion OF tho supreme court said In part.
~ Is settled by weight OF authority that
where principal sends an order 10 "
broker engaged In an established market
Il u
| TORS authority upon the broker to deal ac-
cprding to any well established usage IN
such market or trade. especially when
| such usage Ia known to the principal and
Ia fair In itself and does not change In
any essential particular tho contract be-
tween the principal and agent or involves
no departure from the instructions OF the
principal; provided. tho transaction fpr
which tho broker Is employed Is legal In
It's character and does not violate any rule
OF law, good morals or public policy. We
are of the opinion, therefore. that the as
signments or error based upon the adniis.
sion OF this testimony Is not well taken
~ is not questioned that II the transact
tions In which tho parties are engaged are
illegal. the agent can not recover either
commissions for services rendered therein
or for advances and disbursements by him
for HIS principal, the reason for this rule
being that IN such Illegal transactions OF
which tho agent has knowledge he lis re-
g,srded us ''particeps criminis.' which pre-
clndes him from the recovery OF either
commissions or advances. But the facts In
this case do not bring tho transactions In
question within the operation Of that piin-
rlplc. : 49, II Is we'll scttled that con-
trairts for the future delivery OF merchan
disc or tangible property are not void
whether surh property Is IN existence In
Tho bands of the soller or TO be subscqucnt-
Is acquired On their face these transac-
absence of proof presume that the parties
are gambling, A person may make II con-
tract for tho sale OF personal property for
future delivery which he has not got. Mer-
chants and traders often do this. A con-
tract for the sale OF personal property
which tho vendor docs not own or possess,
hun expects to obtain by purchase or other
wise. Is binding II an actual transfer OF II
property IL contemplated A transaction
which on its face IL legitimate can not be
held void rs II wagering contract by show
ing that one party only so understood and
meant 1t to be. The proof must go farther
and show that this Understanding was mu-
tial--thAt both parties 80 understood the
Transaction
Quoting another decision In a case at
Chicago. the Justice continued. III the
plaintiffs made sales OF wheat for Irwin q
Davis for future delivery. understanding
that these contracts would be FILLED by the
delivery Of grain at tho time agreed upon,
Irwin y Davis were liable to the plaintiffs.
even though they meant To gamble and
nothing more,
Continuing. MIR. Hentz said Speculation
is absolutely necessary to trade. suppose,
for instance, wo have an order to buy 1000
bales OF cotton for European account. 1t
lis exceedingly gratifying TO ma seller
who, oven though he be Spectator, thinks
that he can make n profit when tho Enro-
pean wishes to sell out. Thore are many
mill mon IN tho South who, in making
contracts ahead for the delivery OF drills
and sheetlngs, etc, have not the ready
means for the purchase Of spot cotton, and
who buy futures as hedge, and MS they
buy spot cotton rs wanted they sell out
those futures. These people are really do
ing a legitimate business. taking no risk
In making their contracts for the future
delivery Of their finished product, say.
three, six or nine months ahead. Many OK
the New England militia. on the other hand.
may be regarded AZ spectators In cotton.
as they NEUTRALITY-SUSPICIOUS. wants from three
to six months before selling their goods.
and they frequently have 10 face a declin-
ing market for cotton later on IL is VIGIL
known that many have suffered from pur-
chases OF high cost cotton In the past.
"speculation may, OF course, nave
Temporary effect upon the market, For In
stance, IL 1t were not for speculation dur
ing the decline which eliminated In 1888
cotton would probably have gone cent
n pound lower than IL did. and failures
would have been numerous. But, as mat
tor OF fact, one set of spectators would sell
ont on, a decline aud another would take
their places Tho losses in those years
really foil upon the outside public specula-
tors. M the planters were pretty free sell.
ers ns they marketed their crop
Walter r. Miller. treasurer Of the cx-
change. said "Under the changed condi-
lions Of business communication there now
interests instantly and this Is provided by
The system OF selling on future delivery
The fact that transfer OF interest can be
made Immediately is what makes the busi-
ness OF the world In cotton safe. The pos
sIbIity for such a transfer vs. Imperative.
Now. as TO the charge that future dealings
are gambling: gambling transaction Is
one where there Is no thought or reason for
The action, but a transaction based upon
theories Of supply and demand Is not a
gambling transaction. That is, based upon
the theory the same az II thu party bought
the actual property or sold the actual prop
erty gambling transaction Is one where
the party takes far more interest than his
capital warrants, whether In stocks, bonds.
cotton or any other article. or where he
gives no attention to the questions that
regulate values. These questions are not
restricted, even Ia figures Of supply ana
demand. or TO theories concerning them.
They may also relate to the supply Of the
,.rn.gc,sa enatato rhnuune In ~