The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1908-05-29
After SIlcrn,nIl,


bert Knox Smith, Commissioner of Cor
poratiors, to-day made public the sec
ond and third parts of his report on
the opera ton of cotton exchanges OF
the United States, dealing with the
classification of cotton" and the range
Of grades deliverable on contract"
The commissioner treats of condl-
lions on the New York and New Or
leans exchanges, the only two mar
kets in this country doing a future
business. He has found that the meth
DDS of the two are radically different,
and that criticisms of both have been
made, He finds that In New York
there is overgrading and overclassifica-
ton of cotton, while in New Orleans
there appears to be undergradlng. The
commissioner urges the adoption of a
system of uniform grades, II possible,
thus simplifying business and putting
on end to serious abuses
! The report considers at length the
criticisms directed at the large num-
her of grades now deliverable on flu
ture ontracts, and Commissioner Smith
says that the Importance of the ex-
changes of New York and New orleans
and their effect on the cotton industry
! is desirable, that consideration be given
i to practical lines of improvement in
+, methods.
Mr.. Smith, in his letter of submittal
says in part:
Eighteen Grades.
For the purposes of delivery on flu
| ture contracts cotton Is classed into
a number of grades-eighteen in New
York and about the same In New Or
leans, these two being the only Ameri-
can can markets doing, a future business.
iS hoe oh nAx Al
/ color and amount of dirt and trash in
the cotton. Many criticisms have been
made upon the rules of classification
II both these exchanges and upon
applied. Many difficulties are inherent;
/ the classification of cotton will prob
ably never be an exact science, but
must always depend more or less upon
the discretion of experts. and be open
to honest differences of opinion. More
over there are no uniform standards
Of grades in the cotton trade. Grades
/ of the same name In different ex-
changes differ considerably in quality
1 This is itself causes much of the diff
! terence of opinion.
Radically different methods of clas-
sihcation sre employed in the New
New orleans system is largely pri-
vate affair between the parties, the
exchange merely furnishing the arbi-
traitors. Each lot of cotton when ten
dered for delivery is submitted to such
arpitrators, and they, having before
then3 the price differences "off" or "on
Imlddling cotton officially quoted by the
exchange. determine what differences
snail be applied respectively to the
/ various grades of cotton in the par
ucular lot, though they necessarily de.
i ternlne also. as part of this process
i what these grades are.
New York System.
i The New York system is distinctly
different. New York has what is
called certificated stock of cotton
and the New York exchange officially
4 determines, through its classification
4 committee, what cotton shall be ad-
!. mitted 10 that stock and It's grade
therein, while the inspection fund OF
the exchange is responsible to the
owner of such cotton for mistakes
made by the committee in such CLASH
ficatiop. All cotton Intended for con-
:: tract delivery in New York is sub
! mitted, upon arriving at that port, tc
7 the classification committee. If ac-
cepted, a certificate is issued setting
forth its grades. This cotton there.
after is dealt on the basis of that certi-
\ flcate, unless the same be changed by
reclassification The classification al
New York is thus much more closel.
bound UP with the exchange itself
land its effects are more part of the
operations Of the exchange than II
New Orleans.
. A number of criticisms have beer
! made against the New York system
as TO principle. Thus lots of cotto.
are certified as having so many bale.
, OF such and such grades, but withou