The Cairo bulletin., 1912-09-03
FOREIGN COTTON
EXCHANGE RULES
HURT EXPORTERS
Create False Standard Of Weights
on Tare Sent from the
United States
REPORT FOLLOWS A PROBE
Producer Does Not Ordinarily Stuff.
er from Rules Says Commis.
sioner for Corporations
REPORT FOLLOWS A PROBE
Associated Press Dispatch.

AAS~o>Aa,SA = AN1Np ANi'purSh'
Washington, Sept. RULES OF
foreign cotton exchanges, govern
lAa ARE on cotton exported from the
United States have created a false
standard OF weights which inject
uncertainty into practically every
American cotton sale in the impor-
tant markets of Europe, resulting in
serious abuses, indefensible prac-
tices, and even fraud on the part of
cotton merchants in this country,
according to Luther Conant, Jr.,
commissioner of corporations in a
report to President Taft, made pub
lie today .%;
The report IL based upon an ex-
tensive investigation of cotton tare
the allowance for bagging and
ties enclosing bale of cotton in
order to ascertain the net weight
that American cotton producers were
subjected to serious loss because of
excessive deductions for tare under
the regulations of leading European
markets. The producer does not or
dinarily suffer under these rules, ac-
cording to the commissioner, be-
cause of the active competition
among merchants frr thp-purchase Of
cotton from the farmer for export.
The existence of competition and its
remedial effect, however, he points
out, cannot always be relied upon,
and it is impossible to escape the
conclusion that the producer may be
injured and sometimes is.
Complicate Calculations.
The tare rules, the report declares,
complicate price calculations with an
unnecessary element of chance and
involve economic waste because of
the use Of excessive bagging. If
this waste does not injure the pro-
ducer, or merchant or spinner, 1t
must impose an unnecessary burden
upon the consumer of cotton goods
says the report. Commissioner Con-
ant declares that Immediate action
should be taken to remedy the evils
and offers suggestions for temporary
and ultimate permanent relief.
The American producer sells his
cotton gross weight and as a rule,
according to the report, believes that
he makes big profit on tare by re-
ceiving the same price for bagging
that he obtains for cotton This Is
untrue, the report says, as the evi.
dence demonstrates that the buyer
OF cotton takes the tare into consid-
GRAFTON in fixing the price he offers.
Cotton for export on the other
hand is sold net weight 1t is in
this connection that complication
and uncertainty are injected into
cotton sales. The American ex-
porter. by the terms OF his invoice
contract with the foreign buyer,
must compute the net weight of his
cotton by deducting per cent from
the gross weight. The average bale
of cotton. weighing 500 pounds
gross, contains about ATS pounds of
cotton and % pounds of tare as it
comes from the producer to the ex-
porter A deductroTT or G per cent
under the foreign tare rules, from a
gross weight of 500 pounds, how
ever would leave only 470 pounds
net or s pounds less than the actual
weight Of the net cotton in the bale
In addition to that discrepancy, the
report points ont, the situation Is
further complicated by the fact that
when the cotton reaches its destina.
ton, the foreign buyer, under the
contract with the American export.
er, has the right to demand an ac.
tual test for tare. In this test, the
rules fix a maximum allowance foI
tare of only about 5l3 per. cent OF
261a pounds on a bale of SOC
pounds. This is a discrepancy Of
az pounds as compared with the
30 pound invoice deduction and thu
foreign buyer calls upon the ex.
porter to make good that amount.
Faces Serious Problem.
The American exporter, under these
circumstances, according to the re-
port, faces serious problem tx
avoid conducting business at a loss
Some cotton merchants. Mr. Conan
SAYS, argue that these facts are thor
oughly understood by the trade ant
are adjusted in the price which the
exporter asks for his cotton. The
commissioner does not entirely agre;
-v.-.-----------A.~.
Concluded on Page Six.