The times and democrat. [volume] (Orangeburg, S.C.) 1881-current, 1909-12-07
Victim Of the System, Of Trading. is
Vogue on the Exchanges.
new YORK THE WORST
The Commissioner Of Corporations
Condemns Their Methods and DE
nounces Future Tradins-IIe Says
System Works Harm to Legitimate
PRODUCERS and Consumers OF Staple

Producers and Consumers of Staple
Both the producers OF cotton and
the dealers in that commodity are
The victims Of the system of trading
in vogue on the cotton exchanges of
the country.
This is the burden OF parts and
5 OF the report Of the commissioner
OF corporations, Herbert Knox Smith,
On the conduct of such exchanges.
The practice Of dealing in futures,
as il is carried on at present, is
condemned, although the report does
not condemn the eXistance OF the
exchange.
THE brief discussion Of general
speculation in this report" says Mr..
Smith, recognizes the possibilities
for good inherent in a great central
market like a cotton exchange, and
the need that this good be deyeloped
and evils eliminated by regulations
in line with economic law"
The report is especially condemn
natory of the dealings in futures.
branding this form OF speculation. as
pure. gambling and highly injurious
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 a much lower figure than those
offered for cotton actually in exist
ance. +,ty
The effect of these fictitious
quotations, the report points cut,
tends to mislead the cotton planter
as 70 the true value of his crop,
honestly grown. IN addition, it
leads brokers' to play" both sides
Of the market TO protect themselves
against loss 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
mince words IN criticizing the New
York exchange. After declaring that
the New Orleans methods OF con-
ducting the transactions in cotton
followed natural lines, the report
draws attention to the fact that it
has been proved that the abnormal
depressions in the future price, in
New York were almost wholly due
to improper artificial conditions now
maintained by the New York en-
change. BY maintaining them, the
New York exchange is responsible
for very real injury to the produc-
er and merchant
In closing the letter TO President
Taft which accompanied his report,
Commissioner Smith again takes oc-
casion to reprove the New York en-
change. He says:
After the publication OF the ear
lier parts of this report, the. New
Orleans and New York cotton en-
changes established special commit
tees instructed to consider the sys-
tens Of their exchanges and to &C.
operate therein with the commits
sioner of corporations. Conference
IS have been held by the commits
sioner with both committees. On
the part of New Orleans this CO
operation was very complete, re-
sulting in certain important improve
ments in the rules Of that exchange.
After more than a years inves.lSa-
ton, the committee of the New YorE
exchange has not yet made any hnal
report or taken ary substantial &C
ton