Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1912-09-04
Report Charges Cotton
Merchants of Frauds

of his invoice contract with the for
eign buyer, must compute the net
weight Of his cotton by deducting six
per cent from the gross weight. The
average bale of cotton, weighing 500
pounds gross, contains about 47S
pounds OF cotton and % pounds OF
tare as It comes from the producer
TO the exporter A deduction OF six
per cent, under the foreign tare rules,
from a gross weight of 500 pounds.
however, would leave only 47O pounds
net or eight pounds less than the
actual weight of the net cotton in the
bale. In addition TO that discrepancy,
the report points out, the situation
is further complicated by the fact
that when the cotton reaches its des-
tination, the foreign buyer, under the
contract with the American exporter,
has the right 70 demand an actual test
for tare. In this test, the rules fix
maximum allowance for tare Of only
about SO per cent or 26l2 pounds on
a bale of 500 pounds This is a dis
crepancy of three and one-half pounds
as compared with the 80 pound in
voice deduction and the foreign buy
er calls upon the exporter to make
good that amount.
The American exporter, under these
circumstances, according to the re-
port. faces a serious problem TO avoid
conducting business at a loss. Some
cotton merchants, Mr.. Conant says,
haf ,ly-
understood by the trade and are ad-
jUsted in the price which the exporter
asks for his cotton. The commission
er does not entirely agree with this
view and says that the practical re-
suit of the rules has been that the
exporter adds unnecessary tare 10 his
cotton.
The exporter" he says, naturally
adds tare up to the amount allowed
by the rules (roughly 2612 pounds .
He does this by patching that Is
placing strip bagging on the bale A
small part OF such patching is usu-
ally necessary TO cover sample holes
However. since the exporter in MAX
ing out his invoice must deduct six
per cent, he frequently goes further
and adds tare up TO at least six per
cent Of the total weight OF the bales;
Rometimes he adds even more.
obviously. II the exporter makes
a complete adjustment in the price,
and also adjusts by adding tare. he
makes a profit on such added tare.
II, however. complete adjustment is
not made in the price, this addition
Of tare becomes simply a means of
protection against loss, although in
the trade It is usually spoken OF as q
profit on patching
Granting that the price Of cotton
10 in no way affected by the six per
cent rule, it is nevertheless highly
Objectionable. II results in chang
ing the gross weight OF the bale and
thus introduces an avoidsble element
OF chance, both as TO the actual weight
| Of cotton to be paid for and as 10
price"
AS a result OF this six per cent rule,
the commissioner estimates that at
least so per cent OF American expor-
tations OF cotton are over-tared and
that an insignificant proportion of the
remainder is undertared II is this
use Of unnecessary tare, says the re-
port. that iniects uncertainty and pos
sible fraud into the cotton business.
This uncertainty" adds the re-
port. strikes at the basic factor Of
every transaction, namely, the amount
Of the commodity actually sold. II
I in effect establishes a false standard
OF weights with the inevitably uufor-
tLnate consequences OF such a condi-
ton. It thus gives an advantage TO a
skilled class OF specialists who best
understand the complicated details of
. the business. with a CORES pondtng
disadvantage 70 the less expert. II is
not sufficient TO say that competition
among these skilled classes often forces
them TO turn over the benefit of this
false measure TO the producer. II is
not seriously Contended that this is
always so. and there is thus ever pres
ent the open door 10 fraud There
is always the invitation to cotton mer.
/ chants to adopt improper practices.
and there is thus enticed into the