The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-08-19
LIVERPOOL COTTON
FIRMS FALL IN LINE
Cable Their Willingness tO
Transfer Their Contracts
to December.
ABUSE OF CREDIT SYSTEM
One Evil Which Is Likely to BE
Rcmedled When the Ex-
changes Reopen

Thus far no offic1ai word has come from
The Liverpool Cotton Associa t1on regarS
Ing tho stand which the English market
will take toward the transfer Of contracts
into the December position, thus leading
To gradual cleaning UP OF the local
contract situation. Quite a number of
individual firms, however have cabled
instructions to mako the transfer, and
their example may be followed by others.
Although this holding back by Liv.
erpool Is one cause of the delay
IN reopenlng the Cotton Exchange
the fundamental reasons lie consider
ably deeper. and II ia safe to
say that when the New York Cotton Ex-
change reopens for trading the business
VIII ne done on an entirely different basis
Members generally are beginning to ad.
init that the spirit OF competition in OBJ
tanning brokerage commissions has led to
the growth or customs that are not in
accord with conservative principles
This Is at the bottom OF the reluctance
10 resume operations at a time WHEN the
functions OF the exchange are so much
needed TO aid In the marketing OF the now
crop. The whole question seems 20
simmer down TO a question OF unwar-
rantcd credits, which In many cases have
been granted Unfortunately 10 members
or the Cotton Exchange. cotton shippers.
b'ONNNofor ana epcOuhtOrS.
There was a time when this comp,,ft-
ton demoralfzed the commits sion charrss
One firm that was anxious TO get an nc
count would offer TO cut commissions for
the purpose OF obtaining IL Finally or
ders were executed for the round turn
of buying and selling on tho basis or
s2.5O at a time when the authorized rate
was so. Drastic rules were adopted and
enforced and the evil OF commission cut.
ting was wiped out
The temptation OF large credits was
still held out to the prospective customer.
however. and many aggressive new firms
suddenly bohbcd UP into prominence sim
ply because they extended to clients GER
tain credits that permitted them to initiate
trades W ..iout putting up margins. Many
a Southern trader would have kept out
OF the market II he had been compelled
10 put up an original margin of IS per
bale. but was lulled into false sense of
security by a credit OF 81. 900 or $4,000
which did not have to be remitted until
the account showed loss OF that amount.
As n result OF this competition many
firms and individuals were the recipients
OF credits 10 which they were not en-
titled
In addition to this the Cotton FIX
change firms never had been rigid In
their calls for street margins. All this
's likely 20 he changed IN the next year
and the laxity regarding credits seem,
certain to be reueded.
Liverpool, yesterday cut the price, OF
spot cotton 30 points to the basis OF
6.20d for American middfng, while the
price OF January February was reduced
90 points 10 the basis of 5 GOD. Southern
spot quotations are generally around the
10 cent level.
Miss X NJ Giles issued her semi
monthly report Yesterday. She made the
condition OF the crop 1873, against ~ a,
the end OF July. This gain Of three
tenths OF one point In August is unusual
and was credited chiefly to the beneficial
rains In Texas and Oklahoma
The weekly weather report was favor
able, although mention was made OF toe
much rain interfering with the pickins
Of the crop. II Is generally admitted thai
the crop has improved and that prospect,
| favor a Yield OF $1,000, 900 bales or more