The Birmingham age-herald., 1918-05-25

New OrieanS, on our May COntrdcts anu
 the 100 bales delivered through N. l..
 Carpenter & Co, New York, also on May
 contract, to the secretary of agriculture
 and various senators and congressmen
 from the cotton states and more particu-
 larly to the Alabama members, giving
 copies of the deliveries, the grades. etc
 Our contention being that the deliV-
 cry was made with damaged cotton and
 at fictitious differences as to price tat
 away from the real difference between
 the cotton delivered and middling white.
 The exchange contends that these prices are furnished by 10 standard southern
 markets. There can be no standard price
 for the class of cotton delivered us, from
 the nature of the case, it could only be
 nominal, to prove which we have au-
 thorized you to sell to any dealer in cot
 ton the 200 bales which you now hold for us in New ' Yorlz and buy for us 2oU
 bales middling white at much gerater
 differences than this bill shows.
 PRICES IN DECEMBER
 Last December you handled for us
 1000 bales December contracts in New
 Orleans, exchanging it with cotton fac
 tors in New Orleans for 1000 bales strict middling delivered at our Sylacauga cot ton mills at 115 points on December con
 tracts. Today July New Orleans IS worth, say, 24e, while strict middling COllOI Q6ilNeT6Q ONldCduGd MOAlA NCos 31c, or TOO points difference. This diff ference, we apprehend, is made by the exchange allowing the delivery of dam aged cotton at differences in value made by the exchange.
 'We go into the exchange exclusively
 for hedges and with no intent to specu- late. The above instance shows that July contracts in New Orleans lack 6pu points, or 6c per pound, of being the same hAI ay tr~ac tfr nnanf11har 1 against the mill; shows that somebody dealing through the New Orleans ex- change is given eco points more advan- tage than they had in December, and 1t comes from the authorization of the de- livery of damaged cotton on contracts and in such conglomerate as to grades
 at prices made by the exchange that 1t 1 is only an exceptional manufacturing en- terprse that can use it.
 Tt places the buyer of the contract in the position that he cannot use the cot ton delivered; he cannot sell it, and the only thing left to him is to sell it back to the exchange, and deliver this cotton back. and the buyer of this contract has to go through the same process, using this damaged cotton on the exchange not to safeguard business, but to destroy every safeguard on business; back to the old days before tAe Smith-Lever bill, when New York and New Orleans kept thousands of bales of punk cotton for the purpose of manipulating the market; for the purpose of shearing the lambs ard fleecing the public.
 This transaction shows that the ex-
 changes are again degenerating into the farthest point from safety, the gamble being What are the exchanges going to allow in the shape of deliveries?' and in so far as they can do, killing the price which comes from the law of supply and demand of this great staple.
 "In the Chicago and western exchanges on grain, the basis of delivery is No. 2 and no combination of circumstances all lows the seller to use damaged grain l for the purpose of controlling the mar ket Any tinged, stained, yellowed, boiled cotton is damaged cotton, just like any smelly meat is damaged meat.
 NOT A SOUND BALE 'The Smith-Lever bill, the secretary of agriculture the government, never in- tended the cotton exchanges to be used as Huns to destroy business values or business protection. The 100 bales New Orleans cotton delivered us did not con tain a sound bale and the average de- livery, while apparently 200 points under middling, was really TOO points under mid ding, and as a buyer for manufacturing purposes, we lose not only the depression fn the rlice caused by allowing the tender Of this damaged cotton at made prices, but also the difference between the ex- change price and the middling grade that we would have to have It looks like l the usufruct of negro slaves; 1t was dou- I bis compound interest--the value of the work and the value of the increase. | We cannot conceive a more unsafe | proposition than mill selling goods based on the price of the cotton market as made by the exchange, hedging on the exchange and depending on getting it from the exchange. Middling cotton to- 1 day is worth BOG; middlng cotton on the exchange is 24e, 6c difference. The old expression of the old politician, There is something rotten up the creek
 .The exchanges owe it to the farmers, to the business interests of the country, that these things should not be. The manipulations of the exchange to con trol the market should never be allowed If they are going to allow the delivery of damaged cotton on contracts 1t should be at such a price based on the contract which they have sold, middling basis. that the buyer can sell the damaged goods and not be serious loser. The exchanges should not allow the dam aged goods to drive the straight goods so far as they are concerned, out of the market, and this they have done to- day
 'IEe excndHSe lS dlioWih6 eiio SSAASA to use loaded dice.
 "rhc exchange market has declined 10c per pound, and it is easy to forecast that | if the damaged cotton holds out if there is enough of it, it will decline 15c. The standard cotton, mddling and above, has been affected about Sc per pound. Ev- cry interest coming in contact with cot ton, the farmer, the holder, the manu- facturer. every interest not germain to this gerrymander, has been seriously as- sauited.
 .The exchanges claim that they are conforming strictly to the Smith-Lever 1 biu If they are then the Smith-Lever bill should be amended; if it cannot be srrended, then the exchanges should be abolished, as it is serious menace to business. Yours very truly,
 "AVONDALE MILLS, "B. B. Conner, President