Brownsville herald. [volume] (Brownsville, Tex.) 1910-current, 1912-09-05
CONANTS REPORT
ON COTTON TARE
ABUSE IN RULES OF FOREIGN
EXCHANGES
Commissioner of Corporations Dis
cusses Subject Exhaustively and
Declares Tare Rules Complicate
Price Calculations.
Associated Press.

| ASSOCldleu TIe-S.
! Washington, d. c., Sept. A.
Rules of foreign cotton exchanges,
governing tare on cotton exported
4 from the United States have created
| a false standards Of weights which
iinjects uncertainty into practically
every American cotton sale in the i'm
portant markets Of Europe. result
ing in serious abuses, indefensible
practices, and even fraud on the part
Of the cotton merchants in this
country, according to Luther Con-
ant, jr., commissioner Of corpora
tions in a report to President Taft,
made public today.
The report is based upon an ex-
tensive investigation of cotton tare
the allowance for bagging and
ties enclosing a bale Of cotton in
order to ascertain the net weight
which was undertaken on complaint
that American cotton producers
were subject to serious loss because
Of excessive deductions for tare un-
der the regulations of leading Euro
pean market. The--producer does
not ordinarily suffer under these
rules. according to the commissioner,
because of the active competition
among merchants in the purchase Of
cotton from the farmer for export.
The existence of competition and its
remedial effect, however, he points
out can not always be relied upon,
and it Is impossible to escape the
conclusion that the producer may be
I injured and sometimes is.
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. II
this waste does not injure the pro-
ducer. or merchant or spinner. i
must impose an unnecessary burden
lupon the consumed of cotton goods
Commissioner Conant declares that
immediate action should be taken to
remedy the evils and offers sugges-
tions 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 a big profit on tare
I-by receiving the same price for bag
ging that he obtains for cotton.
This is untrue, as the evidence de-
monstrates that the buyer of cotton
takes the tare into consideration in
fixing be 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 export
er. by the terms of his invoice con-
tract with the foreign buyer, must
compute the net weight of his cot
ton by deducting 6 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 exporter.
A deduction Of percent, under the
foreign tare rules, from gross
weight of 500 pounds. however.
would leave only 470 pounds net or
lis pounds less than the &C ual
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 destina-
ton, the foreign buyer, under the
contract with the American export,
Ter. has the right to demand an act.
ual test for tare. In this test, the
rules fix a maximum allowance fol
tare of only about 5.S per cent Of
26 1-2 pounds on a bale OF 500
pounds. This is a discrepancy o
l3 1-2 pounds as compared with tn
80 pound invoice deduction and tn
foreign buyer calls upon the ex
lporter to make good that amount
The American exporter. unde
these rules. faces serious problem
to avoid conducting business at
loss. Some cotton merchants argu
(Continund on page two.