New-York tribune., 1918-08-15
Cotton Mart Needs
More Storage and
Transit Facilities
Second Session of Govern
ment Hearing Devoted to
Considering Remedies

PRACTICAL cotton men told inveStl-
gators of the Department of Agricult-
ure yesterday that the government
could aid the industry by helping to
improve storage facilities and trans
portation, SO that New York could
carry a large stock of cotton for Amer
lean spinners in the same manner that
Liverpool and Manchester do for Eng
lish spnners
The second day of the hearings con.
Quoted by the Bureau of Markets at
the New York Cotton Exchange into
the cause of the disparity between the
price of spot cotton and the price in
future markets was devoted largely to
the consi liberation of remedies for re-
lieving the abnormal situation in the
cotton trade. Representatives of
Southern and mill interests, who were
present, agreed with the members Of
the New York Cotton Exchange that
the futures exchanges served an eco
nomic purpose, and that the United
States cotton futures act was helpful
to the industry
Trade interests testified at the meet
ing that If the transportation and stor-
age facilities were improved in such a
way that more cotton could be brought
to New York the local market would
become much larger spot market than
1T IS, and, as a result, the market would
automatically become more stable. In
this connection, a large spinner and an
Important Southern shipper pointed out
that such an adjustment would enable
their interests to make wider use of
the New York market to hedge on
future price changes, and the result
would be in the direction of stabiliza-
ton.
True Function of Exchange
Temple Swathmey, member of the
New York Cotton Exchange, said that
the true function of the futures ex-
change should be generally recognized,
and. instead OF trying to tear down
machinery, the government should
strive to build up. At present, he
added, the South cannot use the ex-
change fully because "everything is
being done to stop it from performing
its proper function, instead Of trying
contract as it now stands, he contin-
ued, cannot be improved upon, but the
industry can be helped by better trans
portation, more adequate storage facili-
ties and arrangements for rebilling.
u. 5. Murph, Of the Bureau of Mar
kets, who was in charge of the inquiry
yesterday, replied: 80 far as the De-
partment Of Agriculture is concerned,
we have never had any attitude but the
constructive attitude toward the entire
marketing situation.' Mr.. Swathmcy
and others assured Mr.. Murph that the
cotton trade as a whole regarded the
work of the Bureau of Markets as fair
and constructive.
Other proposals made for stabiliz-
ing the cotton situation were:
The utilization of lOW-crrodo coktor
especially in government orders, wher-
ever satisfactory results can be OBJ
tanned
The revision of the methods of OBJ
tanning quotations in spot markets.
1t was suggested that a national asso-
cation of cotton men be appointed for
this purpose.
The extension Of the work of the Bu
rcau of Markets in such manner that
IT would classify all cotton at New
York and for tender at New York. At
present the Bureau of Markets acts
as the court of appeals when private
paNles dispute the decisions of the
classification committees of the vari
Gus cotton exchanges. The new nro-
posal, if adopted, would probably elm
mate the classification committers of
the exchanges.
MIR. Murth asked the cotton men to
give their opinions about the value
OF proposals to change the contract
basis. All who expressed themselves
rejected the suggestion that future
deliveries should be limited to even
running grades or to average grades.
on the ground that the changes would
be lsadvantageous to the seller by
removing the possibility of using the
exchange as hedge against the new
crop. 1t was said that under tho
present arrangement whereby twenty
one grades Of cotton can be delivered
on future contracts, between 90 and
20 per cent Of the normal crop is un
to the deliverable standard.
Inquiry was made into the large dailv
FLUCTUATIONS that frequently occur on
the future exchanges, as cotton grow
ers contend that the intrinsic value
OF cotton cannot vary as much in one
day AS prices often do "The daily
fluctuations" Walter L. johnson, pres
idcnt of the New York Cotton F,x-
change, told the government investi-
gators, are largely psychological in
cause. Any factor which tend to make
cotton either more or less valuable
may come to number of people at
once. The effect on the future market
Is cumulative and sometimes excessive
because there is buying and selling
from number of sources at the same
time. OF late the fluctuations seem
larger than normally, chiefly because