The Birmingham age-herald., 1913-09-21
COTTON FUTURES AND
THE PROBLEM PRESENTED
OF F-CORRECTING. EVILS
BY PERCY CLARK

i BY PkH
| The Underwood Simmons tariff bill, as
revenue feature, carries into the confer
ence of the two houses of Congress tax
on cotton futures of 50 cents per bale,
with refund, when there is bona fide
delivery made on purchases of cotton fu-
lures on the exchanges of New York and
| New Orleans.
| The debate in the Senate brought forth
much information from many quarters.
Some of the testimony was as contra
dictory and misleading as that in cell
ebrated criminal cases. But for all that
| 1t was fully established that as at pres
ent conducted, the purchase of cotton
futures on the exchanges, is a gambling
game pure and simple, with no intent or
purpose to handle real cotton; that
through manipulation, such as wash
sales" fictitious market was frequently
| made; that the rendering of cotton of in
discriminate class or grade made 1t inn
possible for a spinner to utilize the ex-
changes to anticipate his needs, or the
exporter to operate safely, with the as
surance that when the day of delivery ar
rived he could have such cotton as would
meet the wants of his customers. 1t was
shown that the whole policy of the New
York exchange was to discourage the
| taking of cotton by those who had pur-
| chased for future delivery, certain
months.
The time was, when cotton futures in
New York. as marked on the boards, rep
resented the price of middling cotton at
important interior markets, plus very
narrow margin for freight to that city.
Gradually this was eliminated and the
whole order changed until in recent years
1t is matter of common knowledge that
frequently middling cotton In New York
-"on the board" however-was from s4
to s. per bale under any important spot
market in the south. To the uninitiated
this is hard to explain, but for an en-
phatic substantiation of the fact refer
ence is made to the president of the cot
ton spinners of the south, who stated be-
fore Senate committee that he was con-
nected with Is mills, in the capacity of
,lther president, treasurer or director, and
bkhat he found it impossible to protect his
business by purchases of cotton futures,
for the reason l named
Various Classifications
1t must be understood that in the mat
ter of cotton CHASING there is widening
and varying difference in grades at some
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American commercial or industrial en-
terprise trying to establish itself in China,
the department thinks that you should use
your personal and official influence and
lend all proper countenance to secure to
reputable representatives of such concerns
the same facilities for submitting propos-
els. entering bids or obtaining contracts
as are enjoyed by other foreign CONNER
cial enterprise in the country. 1t is not
practicable to strictly define your duties
in this connection, nor Is it desirable that
any Instructions which may have been
gwen should be too literally followed.
"Your own Judgment and experience,
the standing of the firms who seek your
assistance and of their agents, must all
be given due weight and your action
shaped accordingly. Broadly speaking,
you should employ all proper methods for
tie extension of American commercial in
terests in China, while refra.ning from
advocating the projects of any one tirm
to the exclusion of others"
| Ii is upon the foregoing enunciation of
principle that the American, legation in
China is to be guided in the promotion of
American trade and commerce. and it is
safe to assume that the same principle
will be applied to all other countries.
Meet Cases as They Arise
While this policy is clear in a general
way, it is still broad and will require in
depreciation as time goes by and specific
cases arise. The conditions which prevail
in China are dissimila- from those which
obtain in Latin America In the matter
of concessions for railways and the con-
tracts for loans.
Other nations have no hesitancy in ut'l-
izing the machinery and influence of
diplomacy in promoting commerce, and
the failure of the United States to do
SO has made the work of the American
seeking contracts and concessions exceed
'ngly difficult
Ii is not improbable that ther, will be
an official enunciation soon of the ad-
r.inistrations policy. as above set forth,
concerning it's attitude toward tho action
Which may be taken by American dipo-
matte missions in support or Americans
engaged in business abroad.
The administration icels that American
commerce will naturally expand under
the new tariff policy of the United States.
and it proposes to extend all the aid to
those engaged therein that Is proper on
the part of the government.