The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1916-01-08
The COTTON FUTURES BILL,
LEVER AGAIN INTRODUCEs
MEASURE TO TAX TRADING.
All Doubt of COnstitutionality of Act
Will be Removed, SO That its Pas
sage Would Have Immediate Ef-
feet. ,

Washington, Jan. 5.-Representa-
tive Lever of South Carolina, author
of the cotton futures law recently de-
clared unconstitutional by Federal
Judge Hugh Of New York, today re-
introduced the bill. Mr.. Lever said
he consulted many lawyers in the
senate and house and their opinion
lis substantially unanimous that the
supreme court would not uphold Judge
Hough."
Judge Hough," Mr.. Lever said.
declared the cotton futures statute
of August 1S, 1914, unconstitutional
upon the ground 1t originated in the
senate instead Of in the house. The
facts are that during the Sixty-third
congress, Senator Smith Of South Car
olina introduced bill framed under
the postoffice clause regulating cotton
exchanges; I introduced a bill on the
same subject, seeking to accomplish
the same economic ends. framed un-
der the tax clause Of the constitution,
Senator Smiths bill passed the senate
previous to house action on my bill.
When the matter came before the
house my bill was substituted for
Senator Smiths bill and in order to
get an advantageous calendar position
1t was assigned the senate number of
the Smith bill. The government con-
tention Is that constitutionally the
bill originated In the house.
Nevertheless. If the supreme court
could sustain Judge Hough, the cotton
trade would be SO much upset and dis
organized. during the period inter-
vening between the supreme court de-
cision and a reconsideration of the
question by congress. that I have
deemed 1t the part Of prudence in the
public interest to submit to the con-,
gress the bill for the reenactment of
the statute"
Mr.. Lever said the immediate ef-
feet of the decision was to disturb
prices. The market was steadied,
however, by official announcement
that the act would be considered in
force pending an appeal to the su-
preme court. Should congress reen-
act the law. Mr.. Lever said. the only,
issue passed ION by Judge Hugh re-
manning for decision by the supreme
court would be whether the plaintiffs
who paid the government money un-
der protest In order to test the valid
ity of the statute were entitled to re-
cover those taxes.
There has been every evidence
from cotton producers, spinners, mer-
chants and the great majority of cot
ton exchange MEMBERS" said Mr..
Lever, that the law was wise legis-
lation and has been beneficial to all
OF them alike" M
Mr.. Lever said the bill embodies
no change in substance from the law
as originally enacted.
There is only one respect in which
there has been any considerable con-
troversy as to the value and wisdom
of the cotton futures act" said Mr..
Lever. Section IL treats orders sent
from this country for execution on
foreign exchanges In substantially the
same way as transactions on Ameri-
can exchanges. This was to avoid
evasion of the act and to prevent the
transfer to foreign cotton exchanges
of business which legitimately belongs
to American exchanges. A certain
class Of cotton merchants engaged ir
exporting cotton have complained
that the law has had q result of him
dering tho proper transaction Of the
business of exporting cotton, by pre-
venting hedges on foreign exchanges
which have not so altered their meth
DDS Of doing business as to conform
to the requirements which the act
prescribes as condition to exempting
from taxation orders sent from this
country for execution on those foreign
exchanges"
Opportunity would be afforded to
the cotton trade. he said, to present
to the committee any facts or argu-
ments bearing upon this question.