The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1909-12-08
SYSTEMATIC ROBBING.

Washington. Dec. 5.-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 4 and
Of the report of the commissioner
of corporations. Herbert Knox
Smith. on the conduct of such ex-
changes. The practice Of dealing in
futures. as 1t Is carried on at pre-
sent. Is condemned. although the
report does not condemn the exis-
tence 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 developed
and evils eliminated by regulations
In line with economic law"
The report Is especially condemn
atory 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 = 90 uncertain and 80 many
elements Of chance enter into i.he
transaction that all bids are made at
a much lower figure than those Of
fered for cotton actually in eyis-
tence.
The effect of these fictitious gao
tations. the report points out, tends
to mislead the cotton planter as to
the true value Of his crop, honestly
grown. In addition. 1t 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 like
wise.
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-
Quoting the transactions in cotton
followed natural lines, the report
draws attention to the fact that it
has been proved that abnormal de-
pressions 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 exchange is responsible
for very real injury to the proGuc-
er and merchant"
In closing the letter to President
tart which accompanied his report,
Commissioners Smith again takes oc-
casion to reprove the New York ex-
change. He said:
After the publication of the ear
Her parts Of this report, the New
orleans and New York cotton ex-
changes established special commit
tees, instructed to consider the sys-
tenn of their exchanges and to CO.
operate therein with the commits
sioner of corporations. Conferences
have been held by the commissioner
with both committees. On the part
OF New Orleans this cooperation was
very complete. resulting in certain
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 substantial action"
The commissioner touches on the
activities OF the various organizations
OF cotton growers, all formed with a
view OF controlling both price and
production. He believes, however,
'hat so numerous are the factors of
supply and demand In determining
the price OF cotton that It is impos-
| sible to arrive at any satisfactory
conclusion as to the extent of in
huence exerted by such organiza-
] tions.