The Birmingham age-herald., 1908-05-04
The First National Bank
 BIRMINGHAM. ALA. DepOsitary Of the United States
 And Of the State Of Alabama. Capital $1, ,OOO, 900. Surplus and Profits S65O,OOO This Bank solicits all desirable business on as liberal terms as are consistent with safety. Interest Paid on Certificates of Deposit and in the Savings Department.

changed whenever a change occurred III commercial differences, and, moreover. that they be based upon spot quotations in the delivery market itself owing to the narrowness of the New York spot mar ket. it is impractlcable thus to use the New York quotations a basis for estaD- fishing contract differences; consequently, New York must base it's revisions in the main on the differences prevailing in lead ing southern markets Again, the distance of New York from the cotton belt and the fact that the New York market is pri- marly a surplus grade market where cot ton is ordinarily held for some time, are factors which properly may be taken into account in considering notifications or the commercial-differe system.
 Two questions, therefore, arise: First IS to the frequency with which revisions shall be made; and second, as to the bas's for determining what the actual cominer- cial differences really are.
 With respect to the frequency of re- visions. it is significant that most of those who oppose the present New York system nevertheless assert that differences shoull not be subject to constant revision, nut should be changed only at stated periods
 A considerable portion of the members of the New York Cotton exchange appear to favor a system providing for not mora than three or possible four revisions each A mart of 1907 to amend the bylaws Of the New York Cotton exchange so that one additional revision should be held III December. making three in all Tor the year. This proposed amendment was lost on tie vote. 1t is unnecessary 10 us cuss suggestions of this sort, since IL Is clear that within period of leW months it is possible-and, indeed, eX- tremely probabe-that disparities will oc- cur between differences thus fixed and the commercial differences.
 more practicable suggestion IS mat the revision committee shall be requlrea to act monthly. In support of this propo- sition it is urged that ordinarily ehdhses in commercial differences within pc riod of 30 days are unimportant' ana 1iiae for so short a period changes can De foreeeen with reasonable certainty
 While recognizing the fundamental pro- nrietv of settling contract deliveries or teh basis of strictly current cohmefcidi differences the bureau is disposed to lhe view that A system of reVisions at ieast as frequent as once month, all thiilss considered, might prove as nearly satls- factory and equitable in the case or the New York market as any system that could be adopted. It is true that durihs inc period from 1888 to 1897. when revision meetings were held monthly during me active part of the crop season, the sys- tenn did not give entire satlsfaetloh It is probable however, that, in NieW ol the recent agitation against the aetlon of revision committees return to ruohli- lv revisons would be followed by more faithful work on the part of such commit tees than was secured during the earlier reriod In the event of return to month"; Iv revisions however, these revislohs should be held throughout the crop year and not merely during the active season, since previous experience has snoWh tiiat if is in the summer months that dlsparl- ties between the contract differences III New York and the commercial diiier- ences in southern markets nave oL'on been most pronounced.
 With respect to the second questloh, !. e. the method of determining eomlieI- cial differences, it is probable that all average of the official quotations Of seV- eral representative southern marhetS would give reasonable satisfaction, par ticularly if allowances were made TOT the relative importance of these markets' and. more especially, for discrepancles in local standards of classification. Ihe suggestion has been made that the New York Cotton Exchange employ It's own agents and station them in the south TOT the express purpose of reporting quota tions in those markets, these experts to be furnished with exact duplicates ol
 
 ion Exchange. so that the prices which they reported would always be on the New York basis of classification. The differences reported by such experts could i then be averaged. with some allowances for the relative importance of markets by the New York revision committee Such a system of determining differences seems altogether desirable IT, however for any reason it is impracticable, ! q ouotations for representative markets would probably answer the purpose Ii has been argued that a return to commercial differences, whether revised daily or monthly, would really mean the destruction of the New York Cotton EX- change. on the ground that the New York market would be unable to maintain sufficient stock of cotton as reserve against it's future business. t is diff cult to sec however, why return. 10 commercial differences should increase the difficulty under which the New fork market already labors in this respect For years the New York Cotton EXchahse operated under system. of monthly re- visions in the active part Of the sea son. Under that system, despite some abuses, tic New York market transacted a large business in futures and as large a husiness in spot cotton as it transacts at present, and this was at a time when condition in other respects were not rad ically different from those now existing The argument that a system Of monthly revisions is utterly impracticable is not, therefore, supported by the practical test of experience.
 Moreover, the effect of difference sys- fem upon the business of the New York market alone is not a proper basis Tor framing the rules of an exchange. The first consideration is that the rules shall be equitable and commercial If the New York Cotton exchange cannot exist under such rules, then it has no right to exist at all