New-York tribune., 1918-12-23
Cotton Exchange Free
From Outside Restraints

The New York Cotton Exchange has
emerged more completely from re-
stralnts imposed from without than has
the stock market, which is still re-
pressed by the restrictions of the
money committee. Compared with the
other commodity markets, the cotton
market has been singularly free from
governmental regulation. The lack of a
fXed price for the staple of the South
during the war was cons dered eX-
traordinary, in view of the general pol
icy Of the Administration to regulate
| the prices of the basic commodities
Under the leadership of Charles J.
| Brand, of the Department of Agricul-
ture, the cotton distribution committee,
organized at the initiative of Bernard
M. Baruch, chairman of the War In
dustres Board, for the last few months
made an intensive study of the cotton
industry for the purpose Of devising
what new restrictions, if any, were
necessary, but before many important
changes were instituted by the new
committee the armistice was signed
And on December 10 Mr.. Brand for
mally announced:
"The cotton distribution committee
hereby removes all regulations made
by it during the period OF it's operation.
This includes the order uf October 90.
which would have required the use of
the official cotton standards of the
United States after January /, in max
ing all contracts of purpose and sale.
at is hoped, nevertheless, that firms
will voluntarily increase the use of
these standards to the greatest extent
practicable in the conduct of their bust
ness"
On November 13, last, the cotton dis
n, fon cfo Il
ring and forbade short selling, when
1t seemed that the bottom might fall
out of the high cotton prices. But
short time later the ban on short sales
was lifted, and now the only important
wartime restriction that remains is
the rule limiting the daily f1uctuation
of prices to 200 points In August. 1917
to prevent wild changes in prices on
SINGLE day the exchange limited the
rise or fall to 500 points, and in Octo-
Der of this year changed it to 200. A
similar restraint has been fixed by the
Board of Managers of the Liverpool
Exchange.
The relatively high price of cotton
during the latter part of the war pe-
Rod made the fluctuations seem I'M
precedented, and increased the ami
mostly of the grower toward the cot
ton broker. The disparity between the
price of futures and spots-the price
Of futures usually being much lower
also stimulated feeling of unfriend.
liness, in the land of cotton against
the future exchanges, and denuncia.
tlons of them became SO efrervescent.
rot only in the Southern press, but
also on the part of REPRESENTATIVES.
and Senators from states below the
Mason and Dixon line, that the Depart
ment of Agriculture some months ago
held hearings to datermine anew
whether futures exchanges could find
any. good economic reasons to Justify
their existence. Representatives of the
local cotton exchange brought out
fact that the prejudice of the govern
ment purchasing departments against
low grade cotton. which was acceptable
In future deliveries, but not in SPOT
sales, accounted to large extent for
the DISPARITY, and argued forcibly that
the privilege of hedging against prce
changes which the future EXCHANGES