The Montgomery advertiser., 1906-08-26

II N gomery, member of the firm of c. G: Abercrombie and Company, bankers ana brokers, with ojces in Montgomery, Birmingham. Huntsville and other cit les declared in an interview yesterday 1 that the blow aimed by State Legisla- l lures and by city legislative bodies at | legitimate speculation was blow at
 legitimate commerce. and trade ana | was especially harmful to the cotton grower of the South.
 | MT. Abercrombie Is one of the few | brokers of the South who Is a mem- | ber of the great exchanges. He has
 been prominent business man or | in one of the largest Montgomery banks and has always taken a leading part in the commercial and indus trial welfare of this city.
 tion sentiment now passing over the South is due, in large measure, said MT. Abercrombie, "to the lack or in- | formation of a majority of the public. There are presumably well informed kind, especially on Boards of Trade and Exchanges. It is popular to do so--to follow along after the crowd; reveal to the most intelligent persons their error, and they would thereafter | be strong advocates of the present sys- tenn of trading on the exchange. Un- | just criticism would cease and tnis
 misdirected wave of reform would be | turned into the right channels.
 Legitimacy of the Business.
 "To the layman who bears only or speculation and manipulation. the ex- | changes seem to be founded for no other purpose than to provide. facili- , ties for speculation. speculation IS and the newspapers devote the most space to that class of news, for tne reason that 1t is sensational. But the reverse Is the fact. Speculation IS | trade, and grew up after the exchanges | had been established for the purpose
 of bringing buyers and sellers of cash property together at one common point As the volume of cash transactions in-- creased and facilities were provided for storage of products at market cen I ters, contracting for future delivery
 developed gradually At frst IT. c,,ana,e anese | ty, time Of delivery, the grade or goods; | but they slowly assumed uniformity and the exchanges recognizing their validity and value regulated them Dy rula.
 | that these future delivery contracts became general, and the exchanges
 govern and enforce them. The system l gradually developed and brought about
 wonderful changes in the methods of cotton factors, producers and consum.s l CTS. Prior to the establishment or 1 trading for future delivery as now nractIced on the New York, New Or l ieands and Liverpool Cotton Exchang-
 every cotton deaieT CT, Was tSs nncpe9fain | ties of the market to contend with. | Today he is a merchant working on an assured margin of profit, by reason of his ability to protect himself py sales for future delivery on one or
 the three leading cotton exchanges. Tn other words. the same protection IS
 offered as that of insurance ana tnere HS- struction of buildings if there was nc l insurance protection, and there would
 be no making of large cotton contracts were there no possibility Of nedg- ing. fnsuring against loss by futures. | "As it is now, the man of rev | thousand dollars is protected as well as the millionaire. and the farmers are protected against loss. IT tnls system
 was not in force there would be the | rankest kind of speculation in cotton | as in the old days when men were 1 ruined by one shipment or cotton pe- | cause they were unable to protect | themselves against loss. and had to
 await the arrival of the snip on the l other side before they could SelI 1 their cotton Therefore, If futures pc
 eliminated al. of these advantages VIII have been lost, and the South In par | ticular would be the greatest suHer- | CT and would undergo the same trouDiS | eountry was disorganized after the l Future Contracts Explained.
 The strongest weapon m the hanuS anus | of those opposed to futures has peen 1 the argument that every purchase ana | sale for future delivery IS not t@indlS @ d lconsummated or settled by the actual oe l livery of the property on the contrdce at maturity. l recognize the difhcuity
 of demonstrating to the average reader
 the reason why a contract made 1T,
 January, say, for May cotton, between
 smith and Brown. can be finally set.
 tied months before the maturity of the | contract and without the actual de-
 livery of the cotton. All contracts pe-
 ing, uniform as to quantity, they are | substituted one for the other and mem
 bers of the exchanges, acting as com | mission merchants, do not try to pre-
 serve the identity of the contract made
 for any particular client. In lieu or
 doing so, and for the privilege of sub
 stituting similar contracts, they guar
 antee to their clients the fu'f'llment of
 the contracts, a course not usually
 adopted by agents when acting ti,}G I4r
 principals The right to fos su9stltnte sar tbe
 When a purchase and sale Cthere
 must be both buyer and seller) Tor
 future delivery Is made, 1t must be
 made with the intention on the part
 of the purchaser to receive. and on the
 part of the, seller to deliver the com
 modity. although subsequent events
 may render delivery unnecessary. and
 settlement before the maturity of the
 contract desirable, without Jcopard1z- l
 this cannot be foreseen and the buyer
 and the seller must calculate to be pre- | pared to receive and deliver the cash | commodity at maturity of contract.
 | Speculation and gambling, in the | minds of Q large percentage ot the public, are synonymous. for the reason l that some gambling Gas in bucket
 shNps) Is the counterfeit of specula-
 tioR; while many think that some spec
 ulation resembles gambling. by reason | of the modern facilities provided by eX- | changes for the purchase and sale of | stocks and bonds, and of farm products | for future delivery. To dlsabuse the | public mind of this error and clear up | this point in an unpreJudiced mind. re- l analysis of the present system and 1 methods of conducting business on the l leading exchanges of the world.
 | Report of Commission.
 | "'The Industrial Commission, created | by Act of Congress, approved June. IS, | 1898, was composed of five senators, | five representatives. and nine other l and employments. After an investiga- l ton covering more than three years, l this commission embodied in It's TO- | ports its conclusions as to the func- | tions of speculation In agricultural l products. and in its final report. ap- | proved of the present system Of con
 tracing for future delivery. The re-
 ports of this commission filled nlna 1 teen large volumes and In them every l phase of our industrial life Is discuss l ed With unlimited opportunity in | point of time. money, and the power to | subpoena witnesses and to visit all sec | tions of the country this commission | Ods employed to distribute the surplus Icrops of the country upprpSerVedlI- to oI<