Arizona republican., 1909-12-06
|EXCHANGES. 0F COTTON /
 Methods d These Central Markets Denounced
 PRODUCER MO CONSUMER
Successfully Played Against By Exchanges, Especially the New York Exchange, Says Commissioner of Corporations Smith

Washington. Dec. 5.-Both the pro-
 ducers of cotton and >the dealers in | that commodity are the victims of the
 system of trading in vogue on the cot | ton exchange of the country. zr1is is the burden of Parts and ; ! of the report of Commissioner of Cor
 porations Herbert Knox Smith on the l conduct of such exchanges. The prac-
 tice of dealing :n futures. as il is car
 ried on at present, is condemned, aI- though the report does not condemn , the existence of the exchange @ The brief discussion of general spec 1 uiation in this report" says Mir Smith, recognizes the possibilities for good inherent in n great central market like a cotton exchange. and the need that this good be developed and evils eIim- | mated by regulations in line with eco- homie law"
 The report is especially condemna- tory of the dealings m futures. brand- ing this form of speculation as pure gambling and highly injurious to Iegit- innate trade. In quotations for flu, ture' deliveries of cotton, the market is so uncertain and so many elements of chance enter into the transaction that all bids are made at much low CT figure than those offered for cotton actually in existence
 The effect of these fictitious quota- tions. the report points out. tends to mislead the cotton planter as to the true value of his crop. honestly grown In addition. it leads brokers to play beth 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 exchange in New Orleans and New York are necessary. does not mince words in criticising the New York ex- change. After declaring that the New Orleans methods of conducting the transactions in cotton followed natural lines. the report draws attention to the fact that it has been proved that the abnormal Impressions in the future price in New York were almost who'll ly due to improper artificial conditions now maintained by the New York Cot ton Exchange. By maintaining them the New York Exchange is responsible for a very real injury to the producer and ,merchaft
 In Nelosing the, letter to President Taft which accompanied his report. Commissioner Smith again takes occa- sion to reprove the New York eX- change. He says:
 After the publication of the earlieS- parts of this report the New orleans and New York cotton exchanges estab- iished special committees instructed to consider the systemsf of their ex- changes and to cooperate therein with the commissioner of corporations. Con- ferences have been held by the com missioner with both committees. On the part of New Orleans this cooper ation was very complete. resulting in certain important improvements in the rules of that. exchange. Alter more than a years investigation. the com mfttee of the New York exchange has not yet made any final report or taken any substantial action"
 The commissioner touches on the ac- tivities of the various organizations of cotton growers. all formed with a view of controlling both price and produc- tion. He believes however. that so numerous are the factors of supply and demand in determining the price of cotton that it is impossible to ar rive at any satisfactory conclusion as to the extent of influence exerted by such organizations.