The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1907-01-08
Jordan Explains Charges.

Atlanta, January 7.-President Harvie
Jordan of the Southern Cotton associa-
ton today gave out a statement explain
ing his charges of fraudulent practices of
the New York Cotton exchange. for which
he has asked an order from the postofhce
department. denying to the exchange use
OF United States mails. He said:
Briefly speaking, the fraudulent prac-
tlces of the New York Cotton exchange
are largely chargeable to the members of
the revision committee and the board of
managers. 1t 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, under midding is known as dis
counts and that above midding as prem
ium. In the spot markets of the SOUTH
as an illustration, the difference in the
commercial value of middling cotton and
ordinary grade is about 300 points, or
$40 per bale, fixing thereby an arbitrary
and fictitious high value low grades
"On the other hand, the committee low
cred the price differences of high grades
above middling. This was done to attract
low grades of unspinable cotton to that
market to be used in rendering on con-
u dCNSt ilS6ilB the llldIheI washing sales,
and forcing the transactions of the ex-
change to a purely speculative gambling
institution. On the other hand. the action
of the committee prevents the shipment
of good grades to New York to be held in
rendering on bona fide contracts made to
spot dealers and spinners.
UnspInnabIe Cotton.
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 exchange in the
world A spot dealer or spinner buying
contract for 100 bales of cotton through
the New York cotton exchange will have
presented to him on tender day, or the
9th of the month in which the contract
was made, 100 bales of thirty different
grades, practically all runnig under mid
ding and CHASING as undesirable, unspn-
nable cotton
"Of course no dealer or spinner could
handle this cotton especially when the
lower grade are charged at a fictitious
value of from 80 to $50 points higher than
their relative commercial value. Conse-
quently the holder of the contracts is
forced to sell out and settle upon the
best terms he can make. while the 100
bales of mixed grades of unspinnable cot
ton may be rendered and force the settle
ment of a hundred similar contracts the
same day. This cotton is retained In the
warehouses in New York month after
month for the same purpose. There are
several million bales of contract cotton
bought through the New York cotton ex-
change every month, and all these heavy
deals are lquidated at the end of each
month with about 100000 bales of unspin-
nablc cotton, some of it we are Informed
has been in warehouses for years.
No Spot Cotton Market.
New York has ceased to be a spot
cotton market. No higher evidence can
be presented of this fact than that since
September l only 10000 bales of cotton
have been shipped out of New York to
spinners while more than 100000 bales
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 has been forced on a gambling
basis
II am fighting the practices there of