The Daily Ardmoreite. [volume] (Ardmore, Okla.) 1893-current, 1909-12-08
EVILS MUST BE ELIMINATED
BY ECONOMIC REGULATIONS
EXCHANGES CAN DO GOOD.
REPORT ON COTTON EXCHANGE
Effect OF Fictitious Quotations Tends
to Mslead Cotton Planter AS to
the True Value Of Crop Honestly
Grown-Fsrmer Is Loser

Washington. rec. both the /.
prolucers Of cotton and the dealers /.
Ia that commodity are the victims !
q the system of trading in vogue on
the cotton exchanges Of he coun.
try.
This is the burden Of parts /
and 8 of the report Of Commissioner
OF Corporations Herbert Knox
Smith ON the conduct of such ex.
changes. The practice of dealing
In futures, as it Is carried on at
present. IS condemned. although the
report does not condemn the exist
cnce Of the exchange.
The brief discus sion Of general
speculation in this report" says
Mr.. Smith. recognizes the posi-
biities for good inherent in grea.
central market like cotton eX-
change, and the need that this good
be- developed and evils eliminated
by regulations i'm line with econ
nomic law"
The report Is especially condem-
natory of The dealing in futures.
branding this form of speculation
as pure gambling and highly in.
iun.us to legitimate trade In
quotations for future" deliveries OF
cotton the market is so uncertain
and SO many elements of chance
enter into the transaction that all
bids are made at Il much lower fig.
urc than those offered for cotton
actually in existence.
The effect of these fictitious quo
tations the report points out, tends
to mislead the cotton planter as
TO the true value of his crop, hon.
estly grown. In addition, 1t leads
brokers to play both sides of the
market TO protect themselves against
..ss in such trades, with the result
that the producer is forced to pay
in the end while the farmer loses
likewise.
The report, while recognizing that
the exchanges in New Orleans and
New York are necessary. does not
mincc words in criticising the New
Ior, Exchange. After declaring
that the New Orleans methods #
conducting the transactions in cot.
ton followed natural lines, the re-
port draws attention 10 the fact
that it has been proved that the ab-
normal deprcssions in the future
price in New York were almost
wholly due to improper artificial
conditions now maintained by the
New York Cotton Exchange. BY
maintaining them the New York Ex-
change is responsible for Il very real
injury to the producer and mer.
chant"
In closing the letter to President
Taft, which accompanied his report,
Commissioner Smith again takes oc.
casion TO reprove abe New York
Cotton Exchange He says:
After the publication of the ear
Her parts OF this report the New
Orleans and New York cotton ex.
changes ESTABLISHED special com,
mittees instructed To consider the
/ systems of their exchanges and TO
cooperate therein with the commits,
sioner Cf corporations. Conferences
/ have been held by the commissioners
with both committees. On the part
OF New Orleans this cooperation
was very complete, resulting in Ger.
tain important improvements in the
rules OF that exchange. After more
| than years investigation the com.
mittee OF the New York Exchange
/ has not yet made any final report
or taken any subsequent action"
I The commissioner touches on the
/ activities OF the various organiza.
tions # cotton growers, all formed
with a view OF controlling both price
| and production. He believes. how
ever that SO numerous are the fac
tors of supply and demand in de.
termining the price of cotton that
1t is impossible 10 arrive at any
satisfactory conclusion os TO the