The sun., 1913-11-22
Rule Proposed by Governors Will
Cut orr Credit Of Out
side Traders.
ANTICIPATESFEDERALL
Change Asserted to Be Caused
by Agitation Against Deal
ing in Futures.

York Cotton Exchange has adopted the
following rule, to be voted on by the MEM
hers on December 2:
New Rule No. 27--The extension OF
credits to any person, firm. corporation or
association OF persons other than menu
Ners of the New York Cotton Exchange
and those actively engaged in the cotton
trade is declared to be an act detrimental
to the best interests OF the exchange. and
T. hereby prohibited. Any member violating
the provisions OF this rule shall be sub
feet to suspension or expulsion under sec
tion 90 (a) OF the bylaws.
.The words actively engaged as used
N the foregoing paragraph shall be con-
e,rued to apply to those persons who make
the cotton trade their occupation and de-
vote TO 1t the greater part Of their business
activities
The effect of the adoption of the above
rule il is said will be to end all specu-
lation in cotton by outsiders and TO elimi-
nate that type of occasional dealers VINO
in the past have made and lost fortunes
In cotton. The recommended of the
hoard Of managers are said tn be prac-
tically sure to be adopted. President f.
X. Cone Of the exchange said last night
that. if adopted. the rule will be strictly
enforced.
Result Of Agitation.
This change in the methods OF the ex-
change is said to be the direct result oi
widespread public agitation. particularly
from the South. against the New horh
and other cotton exchanges OF the country.
The South it is said. has long borne am
mus against the New York exchange as
the stronghold OF gamblers VINO made OF
broke the price of cotton as they wished
and always to the disadvantage ot ths
southern planter.
The pr,sent session OF Congress took
.osnizance OF the sentiment Of the south
aRainst the present form OF cotton ex-
change operation. The Clarke amenu-
ment proposed as "A rider to the tari1 DILL
cotton dealers say. would nave taxed
every cotton exchange in the country out
of existence. 1t directed itself against
trading in futures. which the south
claimed was the bulwsrk OF the speculat-
ing gamblers and the ruin uf the planter
through MANIPULATION OF the price.
The Clarke amendment was dropped as
betng also ruinous to the legitimate trader
In cotton who uses his operations on the
exchanges an insurance against
changes IL the price.
The board OF managers OF the New
York exchange is said to have recognized
that the proposed amendment represented
a real demand of the public and to have
preferred that reform come from within.
New Rule Called Elective.
The force of the new rule IL said to lie
IA the fact that credit is the fundamental
In cotton trading and that without the
broad extension of credit on the part of
member firms trading is impossible The
margin of capital required to trade in
cotton under the old rules has been ex-
ceedingly slim. amounting in general to
forty or fifty points, or about one-one-
hundredth OF the value of the cotton dealt
IL is said to be the purpose OF the lead
ers for reform in the exchange to present
the proposed change, when finally adopted,
for the approval Of the Government with
the view that danger Of radical legisla-
tion may be averted.
Many other changes of a technical ma
ture were made by the board of managers
for vote at the special meeting. The most
important Of these was a revision OF
standards OF grades to bring them more
closely in harmony with the standard
types set by the Government through the
department OF Agriculture.
Changes In stand . rds Urged.
1t was recommended that the standard
types of white grades of cotton adopted
by the Department Of Agriculture in 1903
ne adopted for the classification of Gulf
and Texas cotton; that types OF Upland
white cotton, equivalent in grade. should
be prepared by the exchange--with the
approval OF the Government II possible ;
likewise corresponding types of tinged cot
ton.
The managers called upon the COM
mittee on Southern warehouses for a prac-
tical plan for delivery OF cotton in the
South on contracts made in New York.