The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1913-09-10
WOULDN'T lD0lIsACOIIRlcIs,
SENATOR SMITHS VIEWS ON
COTTON TRADE.
Thinks Grade Plan Restriction Will
Meet Objections To Present Sys-
tenn Of selling and Buying.

affects cotton In all of it's phases, was
before the senate. Senator Il. ID. smith
made one of the best speeches On the
subject which has yet been delivered
In the upper house of congress. What
no said is 50 clear. so complete and
80 convincing and goes into amend
ment so exhaumively and explains II
30 thoroughly that II Is herewith given
at such length as space will permit.
IL should be stated here that Sena.
tor Smith has received letters from
number of people in South Car olina,
including L. w Dabbs OF sumter, c..
A. McLurkin OF Chester. w. C. McFad-
den OF Chester, M. p. Lipscomb OF
Gaffney. o. c. Scarborough of Sum-
merton. w. l.. DePass of Camden,
Wade Stackhouse of Dillon and many
others who are interested in the mat
ter.
Speaking on This proposition, Sena-
tor Smith said in part.
Il desire to- say I'm the beginning
that 1 am heartily I'm favor Of the
principle involved I'm his amendment.
Wish to state to the senate, however.
In order that it's members may thor
oughly understand this question. that
the thing about which the cotton rails
ers vi the South are complaining
is the nature OF the contracts on the
exchange. The matter is a technical
one. and therefore 1t will require some
little explanation. '"a'
Under the terms OF the New York
contract there are 10 or more grades.
They did have at one time. believe,
~ grades. In the middle OF those
grades there is grade known as
'middling.' They would sell contract,
basis middling. with a proviso in the
contract that the seller OF the contract
might have the option of delivering on
that contract anything from the low
est and most monumental to the
highest and finest grade of cotton.
The consequence was that the pur-
chaser OF the contract never would
know what grade of cotton he was
going to get.
The practical working OF the mat
ter j. hat the grade committee In
New York, and at one time in New
Orleans, meets and arbitrarily fixes
tho difference between middling and
the grades above and the grades below
for 80 days. The result is that IL an
individual bid 10 cents. basis mid
ding. and the committee had fixed
the difference between that and or
dinary at cent. when the purchaser
came To demand the specific fulfill
ment of his contract he would get
ordinary delivered to- him at o cents.
lie bid 10 cents for middlng. and he
would get ordinary ut the option Of
the seller.
The result was that IL the general
trade would not accept his ordinary at
cents. but would give him only 8.
he lost Sc bale. The result was that
the next time ne bid on middling he
bid without reference to the value OF
middling-without reference to the
law OF supply and demand for mid
dling-but bid with reference to what
he was probably going to get, which
ewas ordinary. at q fixed. arbitrary
difference between what he bid on
middling and what he got ordinary
for. Therefore he bid 3 cents for mid
ding without regard to it's real value.
II can submit papers to the senate
to show that middling cotton on the
board of New York for u long period
Of time was quoted. say. at 10 cents
pound. when the spot middling In the
warehouses. where the buyer would
htvs the right to go and sample each
bale and select his 100 bales OF mid
dling. was from a cent to "a cent and
half above the board price.
1T Is that Generalization from
which the farmers OF the south beg
relief. I introduced "a bill requiring
that each and every contract for the
future delivery OF cotton should speci-
fy the particular grade contracted for
and that such grades as were con-
tracted for should be delivered. Upon
investigation 1 found that what the
senator from Arkansas says Is largely
true-perhaps entirely so--that the
courts have ruled that "a contract orig
mating In one State entered into by
citizens Of another State is not "a sub
ject Of Interstate commerce.
II then took occasion to- write to
the farmers Of the different cotton
growing states and submitted To them
the amendment proposed by the SEN
ator from Arkansas.