The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-09-05
Details Of Methods Suggested
by the Conference Com
mittee.
SENTIMENT IN THE TRADE
Rejection by New Orleans May
Affect Action by
New York.

out were made public yesterday. II was
announced that the conference comm.t-
e" would b in session al the exchange
daily for the following purposes:
First--To receive official notification
from the Liverpool Cotton Association of
the price Of January February as estab-
lshed 10y the association after consulta-
tlon with New York. and OF the quantity
allotted to each New York firm by ballot.
AZ we'll as the quantity allotted to each
Liverpool firm on It's Liverpool New York
straddlc account.
Second-To adjust the price OF Deem
Der contracts in New York, based on $50
American points below the price of Jan
/ uary-February, Liverpool.
Third--To receive offers from members
TO buy or sell December deliveries at the
price adjusted.
Fourth--To ballot sales for members to
other members who are obliged to make
! purchases against sales allotted to them
In Liverpool.
F1fth-To designate banks or trust
companies IN which margins are TO be
deposited horc for account OF Liverpool
firms. in accordance with the provisions
OF the plan submitted.
Sxth---To formulate such rules and
from time to time make such rules or
rulings as are necessary to carry out the
plan approved by the meeting.
The following rules are in force until
cancelled affecting contracts at present
outstanding and such others as are made
in liquidation OF outstanding contracts:
I. Margin on all outstanding contracts
must I've paid 10 the price named i'm para
graph 2.
.. Such margin to he paid by check to
members entitled thereto and not 10 be
deposited in bank or trust company, a.
heretofore.
3. Margins deposited In such banks or
trust companies as shall he designated
under paragraph for the account OF
Liverpool firms are to be held in trust
under such rules ot the New York Cotton
Exchange as cover the deposit OF usual
margins but are not to he paid over to
the parties entitled thereto until the con
tracts either here or in Liverpool against
which such margins are nut ~ are
liquidated.
4. All members who have been able to
effect sales OF January February In Liver
pool are required to furnish proof to the
committee that their sale is IN liquidation
Of actual longs or else to place buying
order In December with the committee
for an amount equivalent TO their sales
In Liverpool.
The NTH section states that each Of
fer TO sell must he accompanied by a
signed statement to the effect that IN"
sal" Is in Liquidation of a corresponding
amount Of long contracts made hefors
August |. 1914. In case such original
purchase is made against sales to splnners
or in other markets II must be agreed To
Immediately purchase an amount of cot
ton equivalent to the amount Of the sale
effected through the committee. In case
p mo. i,.,,sr fa1l far oil Mt In,
broker agrees to request the client to buy
Immediately cotton to hl his sales or to
purchase contracts In some other maric;
equivalent tn he amount of the sale made
by the committee.
II is imposs BILE to tell whether the con
ference suggestion will be adopted. There
are some members who believe that II is
"a one sided arrangement while others
take the position that IL Is Z fair dstri-
button OF an unavoidable loss which must
he assumed 10y some one. One member
whose small commitments should place
him in IA position to BE- an impartial judge
had the following TO say:
Here IL the situation in nutshell.
We have llaudaicd most Of our specua-
tive cotton in New York and the remain
ing contracts are those involved in the
/ Liverpool straddle. These commitments
/ consist Of about 100000 bales OF long cot
! ton sold 10y Liverpool operators in New
! York and about $4,000 bales " long cot
/ ton in Liverpool sold by the English trade
to American buyers.
"Supposc YOU take I.iverpool's stock OF
American cotton, amounting to 100000
! bales II Is reasonable to assume that 900
/ UOO bales Of IL have been hedEcd by sales
to American buyers. This cotton has de-
preclated In value since the exchanges
! we're closed on July 81. Tho Depreciation
based on cost OF replacement. IL. roughly
. .tpuLlpp "a mound. ana on fllt
basis OF 500. 900 bales hcdgcd by sales TO
the American trad" tho loss is SI.'OOpO"
"ln other words. II all trades with
! American op' ra tors were declared OH
! and the exchanges We're to open tomorrow
Liverpool cotton covered by such hedge
s,les would have shrunk in value "
500 900. Liverpool asks us to put up
/ 81 900. 600 to mark our commitments
down To the basis OF cents for Deem
her and 5.a5 for January February No
one need he misled by the talk OF $50 for
December and $40 for January-F February.
"l,ven II this money is deposited there
/ i- no assurance that the contracts viii
be Inundated. but merely that an honest
/ effort will he made to liquidate them
/ The contracts will hc closed ont as cot
| ton is sold In Liverpool and the stock
| at that point reduced. 7 notice that the
/ Liverpool stock decreased only 1000 bale7
| this week, notwthst, nd,ng the fact that
4 hl' FhlP'F'N w ''''' '''''
/ furhidhcn
ION tho surface IT looks like an un-
equal distribution Of loss, New York
! marks the major portion Of tho liverpool
/ stock down TO tho basis az cents for
| December. or 5.25 for January February.
/ Liverpool says IT will ask M more margin
| from that point although the ohllga ton
| still exists Liverpool holds out the hope
! that II will be able to sell cotton to spin
! ners on the basis OF the marked down
price. Under such conditions Liverpool
! takes no los. whatever so far as the
straddie commitments are concerned. while
New York puts IN several millions OF dol
lars. This may he the only way to set
/ tie the problem. hut believe the mem
! bers Of the New York Cotton Exchange
will think twice before they accept II
un6ualinedly"
News was received late yesterday
afternoon that the New orleans Cotton
Exchange had rejected the plan pro-
posed by the conference committee, and il
, IL believed that this may have consider
! able hearing on the final action OF tina
! New York Cotton Exchange,
SUB.TREASURY STATEMENT.