New-York tribune., 1911-11-14
REVISION OF COTTON GRADES
Exchange Meeting Will Consider
Changes Advocated by Some Members


important meeting to consider the revision
Of cotton grades, which has been agitated
from year to year The attitude OF those
in favor OF a change from the existing Gus
tom is set forth in the following statement
Of j. c. Hill, with Messrs. S. II. p. Pell &
Co:
The New York Cotton Exchange has
Teen the subject OF much criticism by
stand the ramihcations OF the cotton bust
ness That some form OF an exchange Is
Necessary Tor SO important a product is
obvious. Without an exchange its market
ing would be characterized by periods of
frantic desire 10 sell and frantic desire 10
buy. without an equaliZing element. That
those closely associated with the cotton
trade are best acquainted with the needs
Of the machinery necessary in the conduct
Of the affairs OF cotton exchange is OBJ
Vious
Under the existing rules of the New
York Cotton Exchange system of fixed
differences obtains, aud this feature Of that
exchange seems TO be the one particular
target Of the criticism OF those who clamOr
against the baneful influence Of speculation.
The one year the spinner protests, the
next year the farmer
Every year during November the revis-
ion committee Cf the New York Cotton
Exchange fixed an arbitrary difference be-
tween the values Of all grades, which diff
ferences continue throughout the re-
4 EllllItt Ol lIt EOlitH SEASON. ana al WHICH
deliveries can be made on contract The
argument in favor Of a fixed difference is
that II definitely determines the Uncnange-
able value OF every lot of cotton compared
with contract prices. The argument
against fixed dhlerences is that IL causes
an accumulation in New York OF the least
desirable grades Of the entire crop. wheth-
er those grades be high grade cotton or
low grade cotton. The revision committee
this year will be wise indeed II they are
able TO determine which grade will Drepon-
Cerate and what its real commercial rela-
ton will be 70 ether grades when naught
remains of this crop but us remnant next
summer.
In lal6 the revision committee made a
mistake in their idea Of the relation be-
tween grades, and as a consequence an
immense accumulation of low grede cotton
(which in that year happened TO be the
undesirable grade) was caused in this mar
ket and made IL necessary for our market
TO express itself at what appeared 70 be a
paradoXical level when measured by the
values obtainable in the Southern spot
markets for middling and higher grades,
although a technical student could have
UOinted out at the time that extreme low
grades In the South and In this market
were at about q freight difference all
the while II was this ~aistake which pro-
voked most Of the criticism against the
New York Cotton Exchange, as other cot
ton exchanges, using the commercial OH,
ference between grades, quickly changed
the values OF these lower grades In tnat
wear and made them unbelievable except
at their relative market value ana, there-
fore those markets did not become glutted
with cotton II took nearly two years Tor
the New York market TO get RID or TINS dc-
rilrnulation Of undesirable stun the value
of which had been oecrted 90 much that
spinners We're afraid Of it.
Remembering this unfortunate hlstahe'
II Is 10 be hoped that the revision between
grades this year VIII receive more thought
hi consideration and that our market
should not be permitted 10 be the dumping
ground for undesirable eottons' "he'her
high grades or low grades
N is generally believed that this crop is
an extremely large one, ard II Is generally
known that during the last decade the
SINNERS have discontinued the machinery
which made these low grades merchant
sbIe The public demands a better grade
If cloth than can be made win H.. Iraoss
below midding are much less des.fdpie
than they were ten years ago. and II TINS
cron * as large as is generally supposed,
Gs remnant will consist II the largest
oua rtitv Of low grade cotton ever known.
although perhaps not the largest percent
S,rhs revision committee of the New York
cotton Exchange should anticipate this
condition by penallzing low middling cot
,o,, II leas. nc 20 l1Rc pound under mld
di;rr and other low grades correspond
tryiv a condition which is quite likely 10
rbtaln the latter end of the season; The
exchange might do well and 20 stlIl iar,,
- and have these differences revised
,,9ore frequently during The year, II not
nGonting the commercial difference system
;,,,t even we're they 10 reach this latter
Conclusion Il could not be made operative
CO.. tho rest Of this season.
'"fe me New York Cotton Exchange
through IT'S revision committee teaches the
south 10 Improve the onality OF their crop
-. ,,,u have accomplished much for the
In'a =, the New York Cotton Exchange
,,,,U r,alfe their contract so exacting In its
WI ,a,,oert ,.lr that its quotable prices equal
tbe valne Of the cotton IN the south plus
..hhe .roi,p+ fron, the point Of origin. then
ne vorL Cotton Exchange viii make
ohT q .,ot ~ cotton market Of New york, City;
=, 49, t,yS' ,e tbe logical port snd the logical
,,,o9ov centre Of this country