The Manning times. [volume] (Manning, Clarendon County, S.C.) 1884-current, 1914-03-11
MEASURE DESIGNED TO STOP
COTTON SPECULATION.
Smith AUTHOR OF BILL
Junior Senator Presents Favorable
Report on Anti-Futures Bill
Would Bar Csc Of Mails to Traders
Who Disregard Government Stand
ards of Value.

Senator Smith Of South Carolina
submitted a favorable re-
port of the committee on agriculture
OF the Senate upon his bill to regu-
late trading in cotton futures and
provide for the Standardization Of
"upland55 and "gulf" cottons sepa-
rately. The bill, which Senator Smith
had drawn and which was introduced
in April last, provides that any per-
son, corporation, etc., engaged in in
terstate commerce, in making or Of
fering for sale any contracts for the
future delivery Of cotton shall speci-
fly the grades contracted for in each
contract, and that these grades shall
be according to the government
Standardization. The effect Of this
measure will be practically to force
the exchanges to adopt the govern
ment standards Of cotton.
A further section Of the bill Of
Senator Smith provides that the in
terstate means Of communication,
such as the mails, telegraph lines and
express companies, shall be denied to
persons and corporations in making
contract which do not conform to the
first section OF the bill, and makes
the violation Of the terms Of the act
a misdemeanor, punishable by fine or
imprisonment or both.
When the bill was considered by
the committee last summer, Senator
Smith was authorized to write the
favorable report of the committee on
it. Pending certain Investigations
which the department was making
under the terms Of a resolution Of
Senator Smith to test the spinning
values of cotton, he withheld making
the report on his cotton futures bill
until these tests had been completed.
Now that these tests have been fin
ished and so completely prove the
contention Of Senator Smith that az
ter all the intrinsic values Of the diff
ferent grades Of cotton are practical,
ly the same and that the main differ
ence is in the amount Of waste, Sen
ator Smith has prepared the detailed
report which he submitted to the
Senate. The report, although not
very lengthy. clearly sets out the
practices Of the cotton exchanges Of
the country. Senator Smith discuss
ed in a clear manner the fixed differ
ence system, and shoTs this to be the
basis Of the Objectionable operations
Of the exchanges.
"This MEANS" the report continues,
discussing the method Of fixed differ
ences, that the price Of the different
grades, as compared with some grade
taken as standard or comparison
and universally known as 'middlins'
is fixed arbitrarily by the exchange
for a period Of time.
"To illustrate: Prior to January
1, 1908, the New York exchange had
divided the different grades OF cot
ton into 80 grades. 'Middling' was
the standard Of comparison. This
might be regarded as representing
zero. All of the grades below 1t, Is
in number, were considered Of greater
value; all of the grades above it, 4
in number, we're considered Of great
er value. The committee of the ex-
change, charged by the exchange
with the duty of fixing difference,
would meet on a given date and de-
termine what would be the relative
prices OF all the grades above and be-
low 'middling' for the next three
months. 1t will be understood that
during all of the years preceding, the
trade had recognized a difference In
the value of the grades, but as a mat
ter Of course this difference was
largely dependent upon the supply Of
the different grades.
"They were never uniform in their
yolume-one season might be open
and another might be cloudy and
damp. During the open season there
would be naturally greater supply
OF the more desirable or higher
grades and a lesser supply OF the
lower or more undesirable grades.
The difference between them would
be less because there were certain
mills which regularly bought and u.s.
ed the lower grades; others bought
and used the higher grades. When,
therefore, the supply Of either one OF
these two divisions was excessive, the
law Of supply and demand was sup
posed to reflect this, but under the
fixed difference on the exchange 1t
did not. The result was that there
was attracted to New York a ;onsid-
erable amount of low grade cotton
which was stored and used as stock
for delivery in settlement Of out
standing contracts.
"a section in the New York cotton
exchange contract provided shat the
seller OF a contract Cor delivery
chou1d sell basis midd!:Ho but the