The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-09-02
QUESTION OF DIVIDING
LOSSES IN COTTON
Ultimate Problem to Be Settled
by Conference of
Exchanges.
FORM OF GOVERNMENT AID
Explanation Of Treasury Plan
by Senator Smith of South
Carolina.

Yesterday was busy day for the
representatives OF the New York. Liver
pool and New Orleans exchanges who
spent much time in conferences, going
over the general contract situation and
Its relation to the three big markets.
Several sessions were held one OF when
was between the Liverpool and New or
leans representatives and another partici-
pated In by the New York and Liver
pool representatives No conclusions
were reached as the time was taken up
In canvassing the general market posi-
tion In an effort to ascertain the extent
and character of commitments
/ 1t seems assured that no definite plan
will be formulated for a day or so. The
magnitude Of the transactions practically
prccludes any hasty judgment and the
delegates to the conference will have to
make careful survey OF the ground
before taking decisive step. II 10
clearly forcshadowed. however, that the
task OF the conference reduced to simple
terms Is the division or apportionmeut
OF the enormous losses that have fallen
upon the whole cotton trade since the
outbreak OF the European war Very
few firms have been fortunate enough 10
escape with more than small loss The
commitments at the end OF July were
smaller than usual, and in this respect
alone s the trade fortunate. II the
calamity had taken place along IN No.
vember or December when millions OF
balee were moving TO market and con-
tracts had been swelled to normal
volume for the movement OF a big crop.
the effect would have been appallingly de-
structve
As matters now stand. however. millions
OF dollars are involved In the amount OF
contracts which must be marked down from
level OF about II cents TO the point at
which the conference suggests their
liquidation. The conference has not
full power TO act and It's work will he
confined merely to invest CATION and sug-
gestion. The Liverpool delegates will
agree with those of New York and New
Orleans and all will submit their findings
to their respective exchanges. These will
first go to the board OF managers on the
New York Cotton Exchange and later
probably to the membership itself
As suggested In THE SUN yesterday,
some price must be fixed which will make
fair division OF the loss. II this should
fall too heavily on any one exchange II
would mean financial disaster for Its MEM
bership II Is a question OF standing to-
gether and sharing burdens as equtably
as possible. Some members of the local
; cotton trade have figured out that fair
basis would be "A division between sia
cents and 1O& cents for New York De-
price around s.62. Any effort to mark
, down New York contracts TO . cents or
below would impose burden which many
firms might he unable TO bear.
Senator Il. ID. Smith OF South Carolina
has given out the following statement
rega riding the manner In which the Treas
ury Department proposes to aid the South
| In carrying Its cotton:
THE plan worked out by the Treasury
Department TO aid In holding the present
cotton crop of the market is in my judg-
ment the best thing that can possibly he
suggested under the existing law. II Is a.
follows I: the national banks or the
bankers that are members OF the regional
system will out Of their own funds take
care Of % per cent the national Govern
ment will take care Of 10 per cent The
national Government is willing to do this
upon basis Of $40 per bale. To Illus
, trate: A farmer has ten bales OF cotton
on which he wants 10 raise money. He
could draw under this arrangement $500,
, He has the cotton insured and stored.
He then makes note for $500 and exc
cutes proper paper transferring the cot
ton as security for his note 10 the bank.
i The bank notifies the Treasury that It
has this paper for $500: the Treasury
! sends to the bank $500. the bank out OF
It's own funds puts up 800 and the
farmer gets his money. This brings the
. farmer. the local banker and the Treasury
this emergency. In my Judgment II Is
important for every bank In the South
, TO put itself into n position where II can
cooperate with the Government In this
q work"
Yesterday marked the beginning Of the
. new cotton year according TO the old
J. cotton calendar. although arrangement
made some time ago provided that the
n commercial crop year should start on Au-
y gust l hereafter The New York Cotton
4 Exchange Issued its annual statement
: placing the commercial crop for the sea
n son ending August 81 at 14,552,456 bales
n This compares with 14,loS,757 for the
|. year previous
:, Spot cotton In the South shows some
4 further weakness, although the declines
n are irregular. Augusta quoted spots y c
> lower at Sc. for mddllng, on sales Of
1876 bales. Sales are being made In the
, Texas interior on the basis OF TIC. aver
: age receipts.
e One interesting bit OF gossip from Liv
erpool Is to tho effect that the enormous
floor OF the old Cotton Exchange has beer
r turned into n drill hall and the cotton pi
= has been boarded over. Recruits are beins
y put through the manual OF arms In thu
y old mart which has witnessed so many
I, fierce battles OF bulls and bears.
i Cotton firms having japanese connec
= lions estimated yesterday that Japar
y would take 500, 100000 worth OF cottoT
:, from America this year, fully IL per cent
- OF the entire American product. II wal
said THAI Japanese agents have been in
structed to buy cotton at sIa cents or bet
u ter. II Is expected that their usual buy
- Ing will be doubled or tripled by the war
Japan's purpose was said to be to OBJ
tain control of the trade In piece good
with China which has been handled hith
erto by Germany and Austria. Japan ant
), the United States will compete for thi
70 trade.
II England is believed 10 be behind Japal
D and Is expected to finance the prosperity
purchases Sixty and ninety day cotto
bills In yen have appeared here. but hav
= been refused by bankers The orders wer
~ then changed 10 sight bills, Early deliv
n cry Is wanted by Japan.