The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1909-12-30
President Planning TO Inau-
gurate Movement to
Stop 1t.
LEGITIMATE BASIS
LONG BEEN SOUGHT
Conference of Advisers to Devise
Means to Control Practice
Is Considered.
By ]. c. wELLIvER.

By ]. c. WELLIVER.
President Taft is planning to initiate
q movement foi legislation TO stop |
gambling I'm futures. A conference Of his |
advisers Is in contemplation TO devise /
means OF controlling this practice. The |
cotton growers of the South. who believe /
that methods of the exchanges have
had the effect OF bearing cotton. and the |
manufacturers OF New England, the |
South, and Manchester, VINO just as
firmly believe that gambling tends 70 !
IA Sc the prices. have been for n long |
time attsIbutinc much OF the trouble |
or the textile trade to the methods of
handling cotton for future delivery.
Likewise there is widespread belief /
that the dealing in futures I'm the wheat |
Dit. the provision pits, etc, has similar
IL demoralizing effect on other neces- !
rsries Of life. The problem Of how to 1
reduce these dealings TO q basis OF
strictly legitimate transactions. has
been considered 10y publiz men for years /
and the question has never yet been /
answered.
The business Of dealing in futures is /
p strictly legitimate and necessary |
transaction. under modern commercial /
conditions Cotton affords the best IL (
River or Manchester must send out his /
agents 10 sell his goods. long before !
those goods are manufactured He /
must place a price on the goods for fu- |
tUre delivery In order to do that I:e /
must know what the raw material ~
going to cost. which VIII enter into the
composition of these goods when they /
sre made.
BUYS For Delivery.
Therefore the spinner goes upon the |
exchange ard buys for future delivery
When he has his years supply Of cot
ton contracted Tor. knowing the prices
II will cost him, he can send out his
selling agents and sell the product of
that cotton with certainty that he viii
not be a heavy loser on the day OF de-
livery. Likewise the consumer benefits.
because the manufacture. getting his
cotton in an open market. where his
competitors also must buy. at prices
which everybody knows, can do bust
ness on much closer margin, with
reasonable security, than he could do IT
there we're large elements Of uncer-
t2intv a bout what his competitor would
have 10 pay for his cotton.
But, il is urged, the dealings on the
cotton exchanges often amount TO ten
times the actual value Of the years
cotton crop, This - accepted as prima
facie evidence OF gambling. vet stu
dents of the methods OF the exchanges
insist Il IS not. a particular bale OF
cotton or bushei Of wheat may con-
ceivablv be sold a number Of times be
fore il IS made into cloth and even be
fore IT Is delivered in the market, and
all the transactions may be entirely
legitimate.
Again, many Of the transactions are
IN the nature OF hedging. which Is
generally regarded as legitimate, and
certainly under present business cOndi-
tons is absolutely ncCessady.
These elements being an considered,
however. IL is admitted by the authori-
ties that there is still more or less ser
ioas effect from speculation. How can
Il be controlled.
Rule of Courts.
Tie courts have laid down "a very sim
pie rulc. a contract FOR future delivery.
made with the bona fde intent in the
mind or either OF the parties that the
actual produce shall be delivered or re-
ceivcd. is legitimate. a contract made
with the Intent in both mems minds
that there shall be no actual delivery.
but merely that the difference one way
Or the other on the day OF delivery shall
De paid la cash. is not legitimate busI-
ness.
Perfectly simple. but also perfectly
impossible Of enforcement Because If
such contract goes into court. one or
the other party iS certain TO declare
positively that Inc had actual delivery iD
mind. The man VINO has bought wheat
at 81. which ON the day OF delivery is
worth 2l.-s. is certain 90 rcColloct that
he intended 10 have The actual wheat
delivered Co him. Ec wants IT, le dOesn
care whether hc gets the difference in
cash. but viii gladly take the wheat
And that iS always the case. II, mas
been utterly impossible. in experience, 20
diGcrcntiate between gambling and le-
Eitimatc trauSa rtfuuE, and the people
who have tried 90 develop a. method TO
prevent gambling have been forced, gen
O. o. Hsaf %
involve the destruction Of the exchange
system of dealing
The Bureau OF Corporations couple
~ years ago made "a detailed myestiEa-
lion OF the subject OF dealing boo cotton
futures. and recommended certain
changes iu the practices of the New
York Cotton Exchange. but these look
ed 10 the reorganization Of practices.
and not TO any effort 90 prevent dealing
I'm futures on the other hand, the con-
cluslon OF the people who made tha-
study was that the exchange system
tends 90 minimize fluctuations, 20 keep
tho market more steady. ANA 70 give the
producer and tho consumer the advan-
faec Of the least possible measure OF
expense for the processes Of the middle
man.
Both Sides En-
ct IS true said one Of the authori-
ties in this matter today. chat the cot
ton growers Of tire South think the
exchanges always are controlled by The
hears. We'll. the spi3ncrg think they
are always controlled uy tine bulls, and
both arc wrong. Iu actual experience.
there must Doc "a buyer Tor every seller,
q seller for every layer. and She forces
which tend TO depTess prices are ,9uu-
teracted by those which tend 80 la-
crease them always making exception
or those cases in which corners and
Squoozes disarTange the situation for a
brief period"
When william Peters Hepburn was
chairman Of the House Interstate Com
mCrCr Committee Inc tried TO work out
bin 20 control this evil, and found
that tho obstacles were almost iusur-
mOuutabic The commission which
President Taft has iu mind r0 study
tie situation will at least find that the
field is Uo new one. ard boz the opinion
az those who have tried Co formulate
remedial legislation, they viii expert
cncc tho utmost difficulty dcyising
legislation which will not do more