The Montgomery advertiser., 1907-01-08
JORDAN'S REASONS
TELLS WHY HE ATTACKED NEW YORK EXCHANGE.
Declares It Is No Longer a Legitimate
 Market And Is Operated Solely For Purposes Of Gambling.

Atlanta, Ga, Jan. 7.-President liar vie Jordan of the Southern Cotton Growers Association, today gave out a statement in which to explain his charges of fraudulent practices of the New York Cotton Exchange, for which he has asked an order from the post office department, denying to the ex- change the use of the United States mails. He said:
 Briefly speaking, the fraudulent practices of the New York Cotton Ex- change are largely chargeable to the members of the revision committee, and the board of managers It is the rule everywhere that middling cotton is the recognized basis of all contracts. whether for futures or spots The difference in the price of grades. un- der middlings is known as discounts and above middling as premium
 Tn fact the spot markets of the South as an illustration, the difference in the commercial value of middling cotton and ordinary grade Is about 200 points or $10 per bale. fixing there by an arbitrary and fictitious high val ue on low grades.
 "On the other hand, the committee lowered the price differences of high grades above middling. sThis was done to attract low grades of unspinnable cotton to that market to be used in tending on contracts, rigging the mar ket, washing sales, and forcing the transactions of the Exchange to purely speculative gambling institution. On the other hand, the action of the com mittee prevents the shipment of good grades to New York to be led in ten- dering on bona fide contracts made to spot dealers and spinners.
 Under the rules of that Exchange, it Is also permissible to tender thirty different grades of cotton In a contract for one hundred bales. This rule is not permitted by any other cotton ex- change in the world spot dealer or spinner buying a contract for one hundred bales of cotton through the New York Cotton Exchange will have presented to him on tender day, or the twenty seventh of the month in which the contract was made, 100 bales of thirty different grades, practically all running under middling and chasing as undesirable unspinnable cotton.
 "Of course no dealer or spinner could handle this cotton especially when the lower grades are charged at a ficti- tious value of from fifty to 150 points higher than their relative commercial value. Consequently the holder of the contracts is forced to sell out and set tie upon the best terms he can make. while the 100 bales of mixed grades of unspinnable cotton may be rendered and force the settlement of a hundred similar contracts the same day
 This cotton is retained in the ware houses in New York month after month for the same purpose. There are sey- eral million bales of contract cotton bought through the New York Cotton Exchange every month, and all these heavy deals are liquidated at the end of each month with about 100 900 bales of unspinnable cotton, some of which l am informed has been in the ware houses for years.
 New York has ceased to be a spot cotton market. No higher evidence can be presented of this fact than that since September 1, only 10000 bales of cot ton have been shipped out of New York to spinners, while more than 5000, 900 bales of of spot cotton have been sold in markets of the South since that date Millions of bales have been traded in through that Exchange, but the final settlement of all contracts l. been forced on a gambling basis.
 T am fighting the practices there of rendering low grades. unspinnabIe cotton on contracts which depresses the spot market in the South to the serious detriment of Southern cotton growers. and I intend to keep up tho fight until the victory is won.
 The revision committee of the New Orleans Exchange meets daily to revise the price differences in grades, accord ing to the relative commercial value of the different grades based on sup ply and demand The difference be- tween the two Exchanges is that New Orleans is a spot market. and New York a speculative or gambling mar ket."