The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-10-07
TO TAKE DISTRESS
COTTON AT 9 CENTS
Details Of Syndicate Plan for
Liquidating Weak Long
Contracts.
EXCHANGE TAX ON TRADES

for more than n month the syndicate plan
formulated by the conference committee
for the liquidation of distress long con-
tracts on the New York Cotton Exchange
was made public yesterday. The proposal
was made known to the members as they
came before the committee to state their
market position and their intentions as to
participating In the plan.
In the official circular II Is proposed to
have corporation organized for the pur-
pose take over all speculative long De-
ccmber cotton at nine cents This cor
poratlon virtually agrees TO stand in the
gap to the extcnt of $3.50 bale, thus
marking the contracts down from nine
cents to seven and half cents. At this
point syndicate is to-step in and relieve
the first corporation from its burden and
carry the contracts outright.
Tho corporation which stands in the gap
from nine cents down to seven and n half
cents IL TO be reimbursed for any losses
from fund to be created out of tax of
$3.50 for the round turn OF buying and
selling each contract of 100 bales after
the exchange opens. This tax will be dis
continued when "A fund shall have been
created equivalent TO any losses on long
cotton taken over by the corporation, plus
interest on money borrowed from tho
banks together with the expenses OF the
corporation. II Is believed that inside OF
three years the tax to be collected on con-
tracts will he sufficient TO repay the losses
OF the corporation and the banks which
have aided in financing the plan.
The proposal was received with general
commentator. The suggestion for the
tax did not meet with the opposition
which many had expected It would. as 1,
was believed that some firms which had
, no distress cotton and therefore were not
beueflciaries OF the plan might object &c
4 such an impost. There L. however. q
broad minded spirit OF cooperation among
the members of the exchange, and Il IL
widely recognized that sacrifices must bt
made for the general welfare
The plan makes II possible for distres:
b cotton 20 be liquidated at Q cents wher
the market price Is really IN cents. Ir
one sense the syndicate or second organ.
izs-ton. agrees 20 take over the cotton N
: - cents and 10 take reimbursement fol
$3.50 per bale or " cents out of the fund
go h' created by the tax on contracts
This might he rather slow remedy for a
situation requiring immediate relief IL Il
were not for the fact that banks have
stepped In and agreed TO advance the
funds noe sst'y % put the plan into in
staut execution.
It is believed that the plan will NEE
with ready acceptance by the members o
the exchange and II this is done 1t vii
pave me way for an early resumption o
business. The committee on rules and by
laws VIII make It's report to-day on IN,
changes made necessary by the enactment
OF the Lever law and II is thought thai
the spCcl1l committee having in charg,
tho Clearing House plan may make re-
port some time next week. With dstres,
cotton taken care OF and the new rule,
formulated. together with the establish
mcut OF a clearing house there woult
seem to be no obstacles in the way o.
opening the Cotton Exchange early in No
vcmhor.
The official circular Of the conference,
committee outlining the syndicate plan !,
as follows
"l. a corporation organized for the
purpose OF taking over all speculative,
long December cotton NJ . cents.
80. Each member and firm Of the TX.
change agrees 10 pay a tax on all subse
quent transactions oc $3.50 for the rounC
turn un'l the total amount paid by tn,
tax shall equal $3.50 per bale on tn,
amount OF long cotton taken over by tn,
corporation plus interest on money Dor
rowed from the banks, and expenses.
-. 4 syndicate agrees to buy at IN
cents from the corporation all cotton
taken over by the corporation (subJec,
to and -, and when the price reaches
tina. figure each member Of the syndicate
viii own outright his share Of the cotton
at -. cents and can dispose OF II as
ne chooses.
-. Tn" corporation will sell as much
cotton as possible above : /, cents.
-. Any firm turning in long cotton 70
the corporation at Q cents may withdraw
II absolutely at that price and obtain
the obligation OF the corporation to pay
to tina; firm $3.50 per bale on such cotton
Withdrawn.
&C. Tho oh.ira. ions Of the corporation