The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-08-06
Managers Rule No Further Pay
mpnts Shall Be Made on
Open Trades.
BIG .STRADDLES' INVOLVED
Step May Force Liverpool to
Li0uidate Contradictions
Buying Power.



crate east to southeast winds.
For Georgia. local thunder showers to-
day and probably tomorrow, except fair to-
day In northwest portion light, shifting
winds
For Alabama warmer and generally fair
to-day. local thunder showers tomorrow
moderate winds, mostly south.
For Mississippi, partly cloudy to-day; local
thunder showers tomorrow; moderate winds,
mostly south
For Louisiana. Local thunder showers to-
day and probably tomorrow, moderate.
shifting winds.
For eastern Texas local thunder showers
to-day and probably tomorrow: moderate
south winds on tho coast
For western Texas. local thunder showers
to-day partly cloudy tomorrow, warmer
IN west portion.
For Oklahoma and Arkansas. generally
fair. continued warm to-day and tomorrow
The question uppcrmost in tho minds
OF the local cotton trade yesterday was
the probable date for the resumption OF
business on the Cotton Exchange. Most
members seem to believe that this will
depend on tho outcome OF naval hostili-
ties. and this In fact appears to be the
general view throughout the cotton trade
OF the country
One feature came TO the front yester.
day. and while II was OF a technical ma
ture v concerns vitality the attitude OF ex-
change officials as to the resumption OF
business. An inkIng Of the problem was
contained I'm the following notice ad-
dressed Ivy Secretary McEnany Yesterday
, to the members of the Cotton Exchange
Acting under resolution Of the board
OF managers Of this exchange I beg to ad-
! wise you that the board considers Il for
the best interest Of the Cotton Exchange
/ that no further payment OF realized
/ profits be made unit, otherwies advised -
Under ordinary conditions such a no
tee might mean much or little II might
mean that IL some trader who was short
1000 bales NJ cotton with paper profits
of $40 per bale and who had not covered
these commitments should ask for an
advance of $1,000 or so the payment
might h. refused
The resolution. however while Il might
cover such contingencies az this ha. nm
entirely different purpose Reference has
been made IN THE SrN several times
recently to the enormous straddle opera.
tons between the New York and Liver.
New York against purchases in Liver.
pool and the transactions run up into
several hundred thousand bales.
Under tho custom which prevails he
tween tho big New York and Liverpool
firms no margins arc called until cer-
tain credit limit has been reached. II
I on certain open trades an account shows
a profit of n stipulated amount this ~
transmitted Immediately to tho nrm hay.
ing this profit, and losses are paid In the
same way.
Liverpool firms which are long OF Jsnu
airy February in Liverpool. for instance,
and short OF January here IN case OF n
declining market would receive from Now
York very large cable transfers represent.
ing profits on open trades. which would
be used TO margin the losses on their long
cotton IN Liverpool
\ Under present conditions Il ir believed
that there will he q disposition to eel
New York against purchases in Liver
pool and thus widen tho differences he.
tween the two markets. So long ~ Liv.
erpool refuses to llquidate It's contracts
and continues 20 stay short In the New
York market Just - long will New York
lack buying power. This would impose
a big burden Oh the local market.
The underlying purpose Of tho resolu
ton. therefore, Is believed 70 no 10 oom
.. pei Liverpool 20 Iiqudate i's engagements
just al New York IA doing. and Il tn
local firms refuse to pay uniquidate'
profits Liverpool - likely TO he SUN
ciently hungry for cash 10 close out II
contracts This would mean heavy buy
ing here, which would give tho marke
n strong sustaining power and avert tn
probability of any further collapse.
Those who understand the situation he
l!eve that the board OF managers of tn
Cotton Exchange has done very wiz
thing In passing this resolution and call