The Montgomery advertiser., 1907-01-03
FRAUD ORDER
 IS ASKED FOR Attack on Cotton Ex-
 change. JORDAN MAKES ALLEGATIONS New York is No Longer Legitimate
 Market. Wall Street Concern Being Operated Solely for Speculation and Gamb- ling Purpose to Detriment of
 Southern Interests.
JORDAN MAKES ALLEGATIONS

washington, an. 2.-Charges of fraud were filed late this afternoon with Postmaster General Cortelyou against the officials and members of the New York Cotton Exchange by Represen- tative Livingston, of Georgia, and Harvfe Jordan, president of the South ern Cotton Association of Atlanta.
 They request that the department issue a fraud order against the officials and members of the New York Cotton Exchange to bar them from the use of the United States mails in conducting what are termed fraudulent practices.
 The postmaster genesa1 referred his callers to Judge Goodwin. assistant att torney general for the post office de- partment. It is likely that a hearing will be held by Judge Goodwin.
 Following are the charges presented to MT. Cortelyoui
 "One-We charge that New York City has ceased to be commercial spot cot ton market and that the New York CoIlon Exchange has developed into a purely speculative or gambling ex- change. and that the grades of cotton shipped to New York and tenderable on the contracts under the rules of the New York Cotton Exchange cannot be used for commercial spinning and that such grades are used solely to depress the price of spinnable grades in the South; to further the speculative fea-I lures of the New York Cotton Exchange to the heavy detriment of the entire legitimate cotton trade of the United States.
 "Two-we further charge that the New York Cotton Exchange is daily using the United States malls to trans init and advertise It's business to the legitimate cotton trade of the United States, and we charge that this busi- ness Is fraudulent and that tho offi- oials and members of the New York Cotton Exchange should be denied the use of the United States mails. > We refer you to letters herstofore attach- 1 ed. N
 'sThree-we further charge that the quotations sent out daily on the de- based contracts of the New York Cot ton Exchange exercise a predominating influence over the legitimate cotton trade to it's great detriment and in- jury.
 No Longer Spot Market.
 '"Four-We further charge that New York City has ceased to be a spot cot ton market for commercial, spinnable grades of cotton due to the present de-
 
 ton Exchange and as proof of the charge we cite to- you the fact that from September 1, 1906, to December 31, 1YU6, there wore delivered from that market only 10.046 bales of spot cotton to shippers out of a total of practically eight million bales of American cotton placed upon the markets of this coun- try at other points.
 'Fifth-We further charge that un- der the present debased and fraudu- lent rules of the New York Cotton Ex- change a large number of unspinnable low grades of cotton are rendered on the contracts of said exchange, which are not permitted under the rules of any other cotton exchange in thes world, and we affirm that such rules are fraudulent.
 "sixth-We charge further, that the official daily quotations sent out throughout the United States mails by the officers and members of the New York Cotton Exchange, both as to flu tures and spots prices, are fraudulent. in that neither represents the true and actual value of spot cotton, but that the same are from s5 to $7.50 per bale less than the market price at which spinnable grades of cotton could be purchased in the South and shipped to New York for tender on said fraudu- lent contracts.
 "In an exhibit attached hereto, we specifically call your attention to the wide difference between quotations of futures market and spot market on December 28 as existing in the New York Cotton Exchange, a difference of 163 points or $8.15 per bale, said diff ference clearly showing a fraud. Your attention Is also specifically called to the official quotations in said exhibit of Hha fttftt of the New Orleans Cotton Exchange, noting the close proximity between fu- lures and spots of that market.
 Unfit for Spinning.
 "Seventh-we further charge that out of the advertised stock of cotton at present stored in the warehouses of New York city amounting to 114,0o0 bales. fully 70,000 bales of said cotton 1 Is of such inferior grades as to rem der the staple unfit for spinning or manufacturing purposes, and that a considerable portion of said cotton has been held in said warehouses for years | and Is totally unfit for any purpose | whatever except to be rendered on the | fraudulent contracts or the New York i Cotton Exchange to the serious detri- l ment and injury of the legitimate cot ton trade of the United States. We, | therefore, ask that you, as Postmaster | O representative of your Department to | the warehouses of New York City and | have all the cotton stored there in- | spected and graded in order to deter mine the unspinnable and unmarket- | able grades of cotton stored in that | market.
 "Your petitioners further state that | they have no desire to jeopardize any | legitimate transactions that are made | through any of the cotton exchanges | of this country. This is no fight | against tho New York Cotton Exchange | as an exchange. but tho charges here | preferred solely against any and all | debased and fraudulent contracts and | which are practiced by | those who are in authority in making | effective the present rules and methods | of that exchange"
 In addition to the formal charges. | many letters and affidavits were sub mitted to the Postmaster General Rep- | resentative Livingston urged prompt | action in the matter and Mrs cortelYou