The Roswell daily record. [volume] (Roswell, N.M.) 1903-current, 1909-12-06
GOES AFTER
EXCHANGES

Washington, Dec. 5.-Bota the pro-
ducers of cotton and the dealers in
thai Commodity are the victims of the
system of trading in vogue on the cot
ton exchanges of the country.
This Is the burden of Parts and
of Tie report of 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 condemn
ed. although the report does not con-
demn the existence of the exchange.
The brief discussion of general
speculation in this report" says Mr..
Smith, recognizes the possibilities
for gooJ inherent in a great central
marks. like a cotton exchange, and
the need that this good be developed
and evils eliminated by regulations
in ia-e with economic law.
The report is especially condemna-
tory of the dealings in futures. brand
ing tais form of speculation as pure
gambling and highly injurious to le-
gitinafe trade. In quo ations for
future" deliveries of cotton, the
market is so uncertain and SO many
elements of chance enter into the
tran sac tion that all bids are made at
a mucl lower figure than those offer
ed foc cotton actually in existence.
tions. the report points out, tends to
mislead the cotton planter as to tae
true value of his crop, honestly grown.
In addition. il leads brokers to play"
both sides of the market to prof iect
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
H-1..
New York are necessary. does not
mince words in criticising the New
York exchange. After declaring that
the New Orleans methods of conduct
ing the transactions in cotton follow
ed natural lines, the report draws at
tentiol to the fact that il 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 Cotton Exchange
BY maintaining them the New York
exchange is responsible for a very
real injury to the producer and ner-
chant"
In closing the letter to President
Taft which accompanied his report.
Commissioner Smith again takes oc-
casioa TO reprove the New York Ex-
clange- He says:
After the publication of the earli-
er parts of this report the New Or
leans and New York cotton exchanges
established special committees in
structed to consider the systems of
their exchanges and to cooperate
therein with the Commissioner of Cor
porations. Conferences have been
held bv the Commissioners with botn
committees. On the part of New Or
leans this cooperation was very com
plete. resulting in certain important
improvements in the rules OF that ex-
Change After more than years in
vestigation the committee 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,
that so numerous are the factors of
supply and demand in determining
the price of cotton that ii is impos-
sible TO arrive at any satisfactory
conclusion as to the extent of infiu-
ence exerted by such organizations.