New-York tribune., 1908-05-05
DEFEND COTTON TRADES
YH4NGE MEMBERS TALK,
Nest Of Them Disagree scith Com
missioner of Corporations.

The recommendations OF Herbert Knox Smith
the Commissioner OF Corporations. in his report to
President Roosevelt the result OF his invesga-
,fon OF the cotton exchanges OF the country
wherein lie urged the abolition Of the fixed differ
euce system on the exchange here and the adop-
.ioa Of the commercial difference system stirred
,n q lively discussion yesterday among the men,
hers Of the New York Cotton Exchange Mr.
smiths conclusions found some supporters but the
majority opinion was that his deductions were not
ssrranted.
samuel r Hubbard ex-president Of the ex-
change said that the members of the exchange
id not consider the system of fixed differences per
fec1 by means, but called attention the fact
that The New orleans system of commercial differ
enoes and the Liverpool system OF actual values
haa both tried in New York and had been dis
csrae5 years ago because of the heavy losses en-
-sile5 % planters, merchants and spinners. Nr
Hubbard said that Commissioner Smiths report
showed that the writer not familiar with the
sc-uaI conditions which existed He summed up
the situation follows:
Fer more than twenty years the older generation
way II escape from the severe losses arising from
the method Of revising the differences between the
GRADES each day each week each month.
They knew the troubles and disputes between
&hfSh le5 20 jie adoption Of the present ystem
which. while not perfect, and no method viii ever
be found u be perfect which changes the value
q ones property arbitrarily. Yet has worked in
Traer the present system the business Of the
New York Cotton Exchange has prospered and in
sui 81 the same disputes and losses Of yore.
20 illustrate the methods in use in Liverpool and
suggested for adoption here: a member Of the
New York Cotton Exchange received 2io bales Of
~ bales were redelivered as soon as possible with
this result: loss on one contract Of Il points,
ps'rrs. Liverpool. about $500.
This was usual experience in New York under
The ola system ~llch We apandoned- A man
shirr-ng cotton 70 l-yerpool 10 deliver does not
josses 81 last season ta American shippers which
res Il u.
arose from the differences in the grades being
lowered s. s. and even Sc bale while the cotton
We believe il is best TO keep nearly fixed differ
e1geS. that 4 shipper IN The South knows when
he ships lis cotton what the differences in New
6-s sav What the contract is Worth anu We are
Lhe only sNenanse IN the w"Tld which publishes the
stock. thai every one knows exactly what he
tuvs vhen he buys a contract for delivery Of cot
ton. As I read the report az Commissioner Smith
Il suggests the return TO methods which We aban
6oned because Of weekly or monthly manipulation
e TIE differences which now takes place in New
know what the committees intend do.
We have seen these revisioas made whenever
81 Or S,-Is5 s1ces seif W, on t5 = 'istoi 3 IA ~
method which who has had experience
2r6GE 5e aiuson la of daily 7 weekly 2d i'eq or
monthly differences IN Liverpool or New Orleans
Atwood Violet, one Of the leaders Of the reform
Movement the local exchange, agreed with the
report lie said.
4
during the last few years regarding the response
t1-i-E attaching 10 the members OF the local
-lauge tor refusing 70 bring about reform Of the
abuses 10 which the bureau or corporations
calls attention have said frequently that the
-espo-sibllity attaching n the revision committee,
. hich net on November =, 1906. serious one,
ana the report confirms this opinion decidedly.
They have made the bed and now they must lie
il
Henry HenJz. of the Oldest cotton merchants
5n TIE exchange. said he considered the present
system fair one He added
We cannot understand how any really sound 10
9ecton can be mace 20 fixed differences. the
New York Cotton Exchange gives in fits daily
Culer the grade Of the ceTtihcsted cotton and the
differences and OF nliddiing and hence every
body has notice OF the terms and conditions of
rhe contract and those who trade. a rule, know
whether high or low grades VIII he rendered They
keep that in mind, aS il governs the market price
q 1le contract
Theodore II Price said the real trouble was with
tho contract IN use here, rather than with the sys-
ten Of figuring differences The local cotton con
--zcr' said Efr. Price, as described basis
rlIddng contract, whereas. in fact. il is really
basis good ordinary contract 8Ir. Price thought
that criticism of the New York Cotton Exchange
would be once disarred If the local contract
were classed basis good ordinary contract, in
stead Of basis rIddliuz contract and quoted 200
-a---S lower