The Birmingham age-herald., 1904-12-14
London View of N. Y. Produce
 Exchange Experiment
THE ENGLISH SYSTEM
Why Former Undertakings In Pig Iron Warrant Business in Thls coun- try Did Not suoceed-To
 Overcome Obstacles.

York Produce Exchange, of dealing in pig iron storage warrants, has thus far excited more interest abroad than in this country. the reason being that the warrant system" in England has long been a factor in the market, The London statist, whose reviews of developments in commodity markets are as rule thorough and we'll informed, has this to say of the New York experiment:
 Twenty years ago the New York Metal Exchange attempted to establish busi- ness In pig iron warrants, but for some reason or other the project did not catch on at the time. And when the American Pig Iron Storage company was formed, considerable effort was made to excite interest in this form of investment. The investing and speeulating public, how ever, were too much occupied in other directions Thus It has happened that while smelters at times place iron In the stores and obtain warrants for 1t, upon which they can borrow money from their banks or from loan and trust companies, others have not been able to sell these warrants when desired, as Scotch or l Cleveland smelter can do. There has been nobody to buy them, unless con- sumner in haste for spot iron, because there was no market in which they could be promptly realized. Thus the warrant stocks in the United States have never risen to any great dimensions, and have been little regarded by the trade except when iron was actually scarce. Nor until recently did smelters seem at all anxious to have a market in which iron war rants can be rapidly exchanged
 HandIcaps of the New Plan.
 But recently they have changed their attitude and have recognized or imagined advantages to be derived by them as pro- ducers in the existence of a free market for iron securities. At all events, the independent smelters outside of the trust combinations have done 80. Iron brokers and dealers have, of course, supported the movement, and 1t has been well comed by the New York Produce Elk change as calculated to bring more bus mess and a larger membership to the institution.
 The difficulty, to our mind, seems to be
 
 In the great variety of qualities of iron produced in America. There the trade sales are graded by analysis, and not as with us. by specific qualities or recog- nized brands. It Is true that the analysis basis has been introduced into the Lon don and Glasgow metal rings by the con- tract for the new 'standard foundry pig iron warrant, to which we have re- ferred on a former occasion. This war rant covers American or German or any iron "conforming to the standard anaiy- sis of the committee of the London Metal Exchange" and the required an- alvsis are fully set forth in the contract form. But this warrant, though au- thorized. has not come Into vogue, nor does 1t seem likely to do so, unless 1t is also adopted as a standard warrant by the New York exchange. If the New York warrant is confined strictly to Northern No foundry iron, operations in 1t must necessarily be limited.
 Possible Change In Plans.
 But 1t Is not likely to be so confined, There are in all the iron centers of the states a number of finance companies which make advances to makers and dealers on pig iron pledged with them. Against these deposits they issue ware house receipts. It is only necessary to make these receipts comformable to any regulations established by the produce exchange In order to make them nego- liable warrants. That means that there will have to be several classes of war
 af aIfx TaFtf other than "ln New York harbor" The Scotch warrant Is for iron deliverable In Glasgow only and the Cleveland war rant for iron deliverable in Middlesbor- ough only, but the new British stand ard foundry warrant Is for iron deliv- erable, on sellers option and at certain decreed premiums or rebates on the con tract price, at Liverpool, Ellesmere Port Manchester, Rockingham, Middlesbrough ar Glasgow. The American foundry war rants, we imagine, will have to be reg ulated on some such scale, while hema- tite iron will doubtless be placed on sep arate warrants as in this country.
 "Scotch Warrants" and Our Own. It has not been the custom in Amer lea hitherto for the companies advancing money on pig iron to have the iron de- ported to their own property The usual method Is to rent a piece of ground near the furnace and to store the iror there, with as little expense as possible in name of the lenders. similar prac tice exists in this country to this extent that banks accept as security for ad vances pig iron in or near the furnaces and merely roped off. The difference fl that receipts for iron so held are no negotiable like the warrant of an inde pendent storekeeper holding the iron fl his own stores and guaranteeing to de liver on application the exact weigh and quality defined fin the document
 The Scotch warrant indeed, originated partly in the failure of some producer to have the iron for which they obtained advances, and partly in the reluctance of buyers for the rise to leave their iror in the hands of makers Connal & Go began to store iron for outsiders in lSh and in 1s43 the system was adopted oi t issuing, instead of receipt Tor eacf . specific lot, a warrant guaranteeing the delivery of so many tons of specified quality of certain defined brands, not oi any one particular brand Since 1843 . connars warrants have taken the place of makers scrip in the market, though