The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-09-04

moderate variable winds
For western Texas. fair TO day and to-
morrow.
For Arkansas, fair TO day and tomorrow.
At meeting OF the members of the
Cotton Exchange yesterday morning In
formal ratification was accorded the pro-
posal OF the conference committee of the
delegates from the New York. Liverpool
and New Orleans exchanges for the liaui-
dalton of the international straddle inter
est Although the Endorsement was given
without q dissenting vote. tho action was
entirely Informal in It's nature and "a
not binding ercept as an expression Of
sentiment
In fact very few members scemed to
have a clear idea Of the details by which
the proposition would DO worked out II
WAS proposed that funds shouid be de-
posted marking down long commitments
in the New York market to the basis OF
$50 for December and $40 for January
February IN Liverpool An effort would
be made to close out as many contracts
az possible on this basis. Provision was
made for the depositins OF further mar
gins 10 the basis OF . cents for December
and b.2o for January February.
1t Is hoped to close out "A good portion
of this straddle interest around the mini
mum figures. and the assurance is given
that no margin calls will be made below
| cents for December and 5.a6 for jan
uary February. In case the contracts are
not closed out however. the obligation
would still exist.
| II was explained that a. fast a. cotton
was sold in Liverpool the hedges would
be covered. thus providing for tho liqui-
dalton of a corresponding amount OF long
cotton in New York. Assurance was
further given that t1nportations Of cotton
into Great Britain by the Liverpool Cot
ton Association would be restricted in
order to facilitate the eale OF old cotton
at that point.
II seems rea sonably assured that the
New York Cotton Exchange would give
more hearty support TO the plan n any
guarantee could be given that as result,
Of tho deposit of additional margins IL
would be possible TO liquidatc the out
standing interest. \ good many members
feel. however. that by this plan they viii
he merely Induced to put up more money
, and that the actual settlement Will bt
as remote as ever. Liverpool would b,
able 10 draw down approximately
$4,000. O0O from New York firms. which
would go just that far toward marking
down the prioo OF spot cotton in that
market
Liverpool sales at tho most are moi
moro than "a. 900 bales per week, and witt
straddle interest placed at $4,000 bales
It would take seventeen weeks TO lei
, the local trade out of It's commitments
; | Consequently the situation would mo-
reach an adjustment much before TN
I lst OF January, even II the plan were
Immediately adopted This looks like .
uretty slow process for working out I'M
situation, and as the members ootaif
. a better grasp on the details OF tho pro
! posal II Is felt that they will try TO obtaiI
. some quicker method or arriving AZ
| | solution.
The financial difficulties Of the pro
posal also have to be considered IL u
, not believed that many trades Woulu ~
! sold out on the basis OF $50 for Deem
: her and $40 for January February. prop
, abIv tho bulk OF them would go out aroun'
| q CENTS for December and 5.25 for Jshu
. ary-February The margin calls on such
Q basis would approximate s4,boo'ooo' mn
= with "A money market which does NOT on
: possibilities for financing OF such mus - :,
Z ,ud. IN. obstacles would have 70
considered. ,,,,a.rs
= ~. ,r.mber Of the board or managers
1 ,,ho voud not permit his name 70 D
T used EXPRESSED the opinion that IL ~
I nrohl,m were TO be solved qulchy on
nractically II would have TO ne on III
hasis Of Liverpool carrying part Q
her stock unhedged, Tho amount OF COY
ION 20 be thus carried would he IN pro
norton TO the amount OF tho shor
E straddle interest to he covered IN I'M
market. II was his view that some eaui,
able price around 10 cents or lOIs cent
n would have TO he liked and the straddl
. undone on that basis. This would leav
e Liverpool long OF $4,000 bales OF cooo
Y which Il would be forced practically !
} yalorize In other words. II would haV
o 10 carry this cotton without hedges. TIM
> in his opinion was not an 'nsuperabl
y difficulty provided importations OF col
ton into Great Britain were Hoppe
J. either by an agreement with the cotto
8 merchants and spinners. Of Great Brutal
. or by an act Of Parliament placing pre-
!. hlbitivo import duty on cotton until I'll
Liverpool stockk was disposed OF. tn
spot cotton in Liverpool under such cor
!. ditions could not decline In price an
" there would be no risk incarryinG II VI
), hedged In this way the contract tang
u could be unravelled at one stroke an
IL the threat OF disaster TO such importar
bodies as cotton exchanges OF the worl
- wuld be averted.
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