The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1908-05-29
REPORT ON OPERATIONS
OF THE COTTON EXCHANGES

identifying the grades of the indlVl-
dual bales. The result is that when
the buyer receives a lot of cotton he
can not from the certificate, sort IT
out into running grades. be-
cause he has no means OF knowing
which bales belong to the given grades.
To sort 1T out he must examine the
cotton itself. at considerable expense
and delay. This Increases the reluct-
ance Of the buyers to accept the actual
delivery of cotton on future contracts
another criticism Is that the New
clusion of extremely weak or "perish-
ed" staple cotton, as the New Orleans
system practically does. While the
New York classification committee as
serted that as a matter of principle
they would not admit persisted staple,
nevertheless, so far as the rules are
concerned, the grades are determined
chiefly by color and amount of trash,
and there is no definite standard by
which weak or persisted staple can be
determined and excluded, and some
such cotton has actually been certi-
heated. It seems probable that the
amount is!not large, but the presence
of any of 1t is extremely Objectionable.
owing to the sellers option of selecting
grades to be delivered The admission
of even small amount Of such low
grades has a very Injurious effect in
depressing disproportionately the price
of future contracts. The charge. how
ever, that the New York stock is the
refuse accumulation I'M Of many years IS
TENDER 1904. the entire stock was re-
duced to 1900 bales. of which a con-
siderable part was of high grade
| Criticisms have been made also as to
the application of the New York sys-
item. There has been considerable over
classification or overgrading by the
New York committee. This is conclu-
the inspection fund. This fund it Will
be remember ed, is used to indemnity
the owners of certiiicated cotton for
mistakes IN grading by the classic
] sixteen years, these payments, includ-
ling the net payments for reflections,
averaged less than $3.50 a year, a total
less than and sgos9 n M "a aoa for 5ae
was almost $4,000. This great in
crease in these payments shows thu.
| the previous classification must have
been far too high.
| A specific instance of deliberate
overgrading took place in the latter
part of 1906, when the board of APP
structed the classification committee
to admit to the certificated stock all
cotton which passed the preliminary
and informal examination of the as
ssistant inspectors at the dock, although
the same might, later have been held
lrejectabe by the classification COM
mittee on it's final classification This
! IVlIOu, Illus lOICcu III, was 10 Jake
the lowest grade Of the certihcated
Istock.
This ruling was in direct conflict
1 with the bylaws Of the exchange The
Classification committee entered pro-
test, and even noted upon certificate
slips of such rejectabe cotton, SHOULD
have been rejected" When the new
/ management OF the exchange came
came into office in June, 1907. this
practice was stopped
A contrary critis.n has been made
/ of the New Orleans exchange to the
.leffect that there is an undergrading
1 there and While the proof of this is
/ not conclusive, 1t Is probable that in
i certain cases it is true. 1T is quite
4 likely that the effect Of the general
4 opinion of the. exchange has been to
4 cause the arbitrator to be, conscious
! ly or unconsciously, too severe in their
/ classification at certain times a nuns
her of Southern merchants have made
Il such assertions very vigorously.
The bureau does not consider the
/ New York system of classifying and