The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1908-05-22
DENOLlNCE5 METHODS
or COTTON EXCHANGE
Manufacturers Want Contract Quotations Responsive to
Spot Conditions Institutions Necessary, but Need
Reform and Elimination Of Gambling

M Following is the full. text OF the i'm.
portant report OF the committee on
cotton exchanges, composed OF Messrs
Ellison A. smyth, chairman; Lewis w
Parker and r. NJ. Miller, Jr.:
The undersigned. being members OF
the committee appointed to consider
the question OF cotton contracts in re.
lation to the needs and necessities OF
the spinner, and also In relation gen.
orally to the rights OF parties to the
contracts, have held meetings and have
discussed the question very fully with
New Orleans exchanges, as also Will,
representative cotton brokers and
dealers.
Your committee would express.
their hearty commentator and APP
prevail of the recent report made by
Mr.. Herbert Knox Smith, OF the Bureau
OF Corporations. with reference to the
question of cotton exchanges. This re-
port exhibits great care and study OF
the situation. and is so manifestly
just and the criticisms made of the
exchanges SO true. that your commit
tee can but express their hearty ap.
prevail Of the report. We feel that
the cotton trade at large Is under obli.
cations to the commissioner for the
care and study he has given to this
matter.
Quoted Mt Less Value.
I'm view OF this report. 1t Is need.
less to review the conditions so clearly
pointed out applying on the New York
Cotton Exchange, and to a much less
extent on the New Orleans exchange
it should be contract purchase or
these exchanges. Theoretically, the
cotton contract on the exchanges
should represent the value of spot cot
ton, and 1t Is an absurdity when there
is such variance in the price OF cot.
ton as represented by the contract or
the exchanges and the price of the
contracts themselves.
These differences on the New York
exchange are SO great as to render
practically valueless hedge made by
cotton broker on the exchange, OF
purchase made by cotton spinner
Indeed, the differences between the
value of the contract and spot cottor
being SO great. have caused enormous
losses to both classes OF operators. anc
based upon the experience of the pas
several years would make it impera,
tive that these operators cease the use
of the New York exchange for the
purposes stated.
RcnnirmS Former stand.
I'm 1906, at the Asheville meeting
the question OF the character OF cot
ton to be delivered on contracts. We
reaffirm the position taken by our as
ISOLATION at that time. That position
was as follows:
"Cotton to be of any grade from
low middling to fair, inclusive. and y
tinged or strained, not below low mid
ding (fair COLOR in value.
price to be based on middling
with additions and deductions for Other
grades to be made according to rate.
OF Cotton Exchange existing on the at
ternoou OF the day previous to the dat
of notice OF delivery.
No certificate OF classification tt
embrace qualities more than four quar-
ter grades above or below the near
grade Of the cotton covered In suct
certificate.
Ono dusty or gin-cut cotton to be
deliverable, dusty cotton being refined
as cotton lessened in value more thar
one eighth cent by reason OF dust.
~.No cotton containing more than
cent. Of burr or more than / per cent
of any other foreign substance. to bt
deliverable under this contract.
No cotton to be deliverable under
this contract unless 80 per cent. OF
said cotton has a staple over 11-16 OF
an inch in length. a S determined by The
classification committee.
"'Nolinters shall be deliverable under
| this contract
"The exchanges have since that pc
Rod very properly eliminated quarter
grades, and therefore the report Of tn,
committee at that time must be con
sidered In connection with this elimi
nation of quarter grades.
Need Further Notifications.
'In addition to the recommendation
| OF the association of 1906, your com
mittee urge that the exchanges furthel
modify their contracts SO as to maxi
provision for the following require
ments
81 Where cotton Is certifcated b,
| the exchange, no certificate for 10
OF 100 bales should be allowed to con