The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1906-12-28
FRAUD ORDER ASKED
SOuthernerS to Wage War on
n. Y. Cotton Exchange.
DELIVERIES ARE LOW GRADE
Contracts Said to Be Satisfied with
Quality OF staple Which Cannot He
Spun - Wide Difference Between
New York and New Orleans Prices
Agricultural Department Impat ient

Representatives Of the cotton growing
interests Of the South are preparing data
on which to base a request that the Post
Office Department issue fraud order
'against the New York Cotton Exchange.
They are certain THAI the information
they will file Will make the issuance OF
'such an order imperative. The matter was
tentatively presented to the department
late yesterday afternoon.
The grounds on which the postal author
tiles viii be asked to deny the big New
York concern the use Of the mails is that
il conducts a business which is not legiti
mate. The SOutherners are not making
tight on the business of dealing in futures,
per Sc. as they assert that the New Or
leans Cotton Exchange handles its af-
fairs, i'm a way which is entirely legiti-
mate, and which is altogether different
from the methods of the New York eX-
change. If the Post-ofiice Department puT-
sues the course that is usual in such mat
tiers. the promoters Of the movement say
that an order forbidding the metropolitan
concern from using the mails for the
transmission Of contracts certainly will be
forthcoming
GruYeness of the Charge,
The principal complaint against the New
York exchange is that the cotton delivered
on contracts sold on its floor is not of the
middlng grade or its equivalent. but a
rotten" commodity which cannot be spun
which is only fit for making horse collars.
mattresses. etc. and on which the buyer,
if he does not dispose Of his contracts be
fore notice day, must in some cases lose
more than so per bale. regardless of price
fluctuations. In New Orleans, il is assert
ed. cotton delivered on contracts pur-
chased in the usual course Of future trad
ing IS always the grade called for in the
contracts.
Persons who are interested in the mat
ter point to the wide discrepancy between
the price Of cotton i'm New Orleans and
New York in support Of their contention
that the New York exchange does not do
business on a straightforward, above
board basis This difference now is not
far from a cent "a pound. while the Diff
ference between January and March on
the New York exchange is from 30 to 81
points. or nearly a third Of a cent a
pound. To-day is notice day. and recent
dispatches from New York are 10 the
effect that many firms are willing 10 re-
ceive cotton on contracts. If rendered.
inasmuch as the difference is considerably
in excess of carrying charges. and that
"a profit would therefore result from
such action. SOutherners who are in
touch with the movement against the
fr-o
Of the sort is possible. since any cotton
delivered would be Of the rotten" variety
already alluded 20. and that anybody re-
ceiving il would certainly lose, despite
the difference in prices on January and
March contracts. There are only a very
few bales Of middling cotton in New
York. ii Is said in the same quarters.
Representative LivinEstOn's Idea.
Representative Livingston, Of Georgia,
who keeps closely in touch with all mat
tiers affecting cotton. disCIaimed positive
knowledge Of the movement to bring
about the issuance Of a fraud order when
seen yesterday. He told. however. Of
having received a letter from a we'll
posted Southerner who asserted that cot
ton growers in the Southern States lost
S31 10000 the past year as d result Of the
practices Of the New York exchange. Mr.,
Livingston turned this letter over to the
Secretary Of Agriculture, who replied,
through the chief Of one Of his bureaus.
that the department could do nothing in
the premises. The Georgia Congressman
says that efforts TO secure the enactment
Of regulatory legislation has failed and
that. in his opinion, the only way TO get
at the root Of the trouble is through the
| Issuance Of a fraud order.
The understanding in Washington is
that the Cooperative Farmers Union is
taking a lively interest in the matter.
and some who are in touch with the stu
alton here think that that organization
Will submit the request for a fraud order
/ 20 Postmaster General Cortelyou. Presi-
dent Barrett, of the union. has head
/ quarters in GAINESVILLE, Ca. 1t is thought
to be probable that the Southern Cot
/ ton Growers Association. of which Harvie
l Jordan, Of Atlanta. is president, will also
take an active part in the matter. Mr. Jor-
dams organization is the one which waged
war on the bureau of statistics of the
/ Department of Agriculture, and succeeded
/ in driving Chief Statlstician John HYDE
and Z. ). Holmes out Of the service.