The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1907-01-02
Cotton Growers Versus New York

Southern cotton men, both producers
and middlemen, should attend the COM
ing convention of the Southern Cotton
association If for no other reason than
to give expression to their condemna-
ton of the New York Cotton Exchange.
That concern cannot perhaps, be abol-
ished, but it can be rendered notorious,
and even odious, and the association is
the right place to voice southern senti-
ment and feeling.
The cotton rendered ON contract in
New York is often so rotten that few
will take it, and the result is that they
proceed to protect themselves by sell
ing an equal quantity of cotton, and in
that way New York becomes as a rule
bear market Its trend is towards
/ the spinners, and away from the pro-
ducers of the staple. In order that this
important matter may be plainly I'M
derstood we give here the explanation
of the New Orleans Democrat.
1t says:
Contracts for the future delivery of
cotton are made on the basis of Middlng,
but any grade or half-grade, from fair
to good ordinary, both inclusive, may
be rendered with allowances on or off
! for qualities better or worse than the
basis. 1t goes without saying that the
correctness of the plus or minus allow
ances is of supreme import to the i'm
tegrity of the contract. In New Orleans,
the differences are those actually pre-
vailing on the sixth day before delivery
is due and these differences are deter
mined by the values current in the spot"
market In New York. on the other hand,
the differences are fixed at the outset
of the season, once for all, and before
the character of the crop can be accur-
ately known. Manifestly, the New York
plan exposes the buyer of contracts to
serious loss, because he may have to
take either good grades or low grades
for more than they are worth, relatively
to the basis. The seller is safe, being free
to deliver the grades that suit his book
At the present time, for example, the
receiver must take good ordinary with
an allowance of cent and a quarter
whereas the actual difference is almost
two cents This is a trap for the unwary
outsider and even the wary inslder some-
times gets caught Per contra, the New
Orleans system is fair to both parties and
the Spectator must make his money by
foreseeing the drift of events.
The southern people have patiently
stood the New York device for rigging
the cotton market with view to de-
press arbitrarily the price of the staple.
Statistics, for example, show that on
December 20 December contracts in
New York were 1877 points below mid
ding spot prices. That sort of trickery
has, it is estimated, cheated the south
out of millions already this season.
If the postoffice authorities and the
law authorities will not stop the fraud
ulent practices of the New York Cotton
Exchange, let the Southern Cotton
association at its coming meeting pre-
sent the facts clearly and succinctly.
and then let an expression of opinion
thereon be put on record and dstrib-
uted far and wide. The subject is one
that calls for action, if action be pos
sible-if not then for an expression
that will take the hide off the rascals
who have devised and who keep afloat
fraudulent quotations of cotton.