The San Francisco call., 1907-01-03
ASK
FRAUD ORDER
File Charges Against New
York Cotton Exchange,
Alleging Illegal Practice
METHODS DENOUNCED

WASHINGTON, Jan Charges of
frald were filed late this afternoon
with Postmaster General Cortelyou
against the officials and members Of the
New York Cotton Exchange by Repre-
sentative Livingston of Georgia and
Harvie Jordan. president of the South
ern Cotton Association of Atlanta On
the charges filed they base request
that the PostOffice Department issue a
fraud order against the officials and
members of the New York Cotton Ex-
change in order to bar them from the
use Of the United States mails in con-
ducting what the charges term fraud
ulent practice.
The Postmaster General referred his
callers to Judge Goodwin, Assistant At
torney General for the Postoffice De-
partment II is likely that hearing
on the charges will be held by Judge
Goodwin before a determination OF the
questions is reached.
Following is a summary OF the
charges presented to Cortelyou:
1. We charge that New York has ceased to
the New York Cotton Exchange, operating under
its present debased and fraudulent contracts; has
exchange, and that the grades OF cotton shipped
TO New York and tendersble on the contracts
under the rules OF the New York Cotton FIX
change cannot be used for commercial spinning
purposes, and that such grades OF cotton are nseo
solely 70 depress the price Of spinnapie gtaoes
in the South, to further the speculative features
Of the New York Cotton Exchange 10 the heavy
detrment Of the legitimate cotton trade OF the
NO LONGER SPOT MARKET
2 We further charge that the said New York
Cotton Exchange, through its ofhcers and mem
bers, is daily using the United States mails Tor
the purpose OF transmitting ana adEeruslng
their business TO the detriment of the legitimate
cotton trade OF the United States and we charge
that said business is fraudulent ana said officials
/ and members of the New York Cotton EXcnaQEN
should be denied the use Of the United states
3. We further charge that the quotations sent
daily the debased contracts OF the New
York Cotton Exchange exercise a predominating
insuence over the legitimate cotton trade, TO
its great deriment and injury
ceased 10 h. a suof cotton market for CONNER
cial spinnable grades OF cotton, due 10 the
present debased contracts Of the New York Cot
cite 20 you the fact that from September 1, 1906,
TO December 81. 1906 there only delivered
from that market 10,l46 bales Of spot cotton
70 shippers, out Of dotal OF practlcaliE e-VOO,-
600 bales OF American cotton placed on the mar
kets Of this country at other points
5. We further charge that under the present
debased and fraudulent rules Of the New York
low grades of cotton are rendered on the con-
tracts Of said exchange. which are not per
mitted under the rules Of any other cotton eK-
change i'm the world, and we affirm that such
g. We charge further that the official daily
quotations sent out through the United States
mails by the officers and others Of the New
York Cotton Exchange TO their customers, both
to future and spot prices, are fraudulent, in
that neither represents the true and actual value
Of spot cotton. but that the from $5
TO $50 per bale less than the market price at
which spnnable grades of cotton could be pur-
chased IN the South and shipped 70 New York
for tender on said fraudulent contracts.
OF INFERIOR GRADE
z We further charge that out of the ad-
rertised stock Of cotton at present stored in the
warehouses of New York City. amounting to ia
600 bales, fully TO- 600 bales Of said cotton Is
OF such inferior grades as to render the staple
and that a considerable portion OF said cotton
has been held in warehouses for years and is
totally unfit for any purpose whatever except
10 be rendered the fraudulent contracts Of
the New York Cotton Exchange 10 the serious
detriment and injury Of the legitimate cotton
trade OF the United States. We therefore ask
that you as Postmaster General OF the United
States send representatives, Of your department
the warehouses OF New York City and have
al the cotton stored there inspected and graded.
IN order officially 10 determine the character Of
the unspinnable and unmarketaDle grades OF cot
ton stored IN that market to be rendered under
the fraudulent contracts Of the New York Cot
ton Exchange under the present practices Of that
exchange.
In addition to the formal charges,
many letters and afldavits in support
OF them were submitted TO Postmaster
General COrtelyou.
Representative Livingston urged
prompt and decisive action in the mat
ter and Cortelyou said the charges
would be given attention by the de-
r1arfma0t