Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1918-06-21
IN ENFORCING
COTTON FUTURES ACT
Senator Smith Claims 1t Has
Caused Prices to Drop Be-
low That of Spots
BY THEODORE T1LLER.

senator's and congressman have already
complained to the department of agri-
culture about a seeming laxity in the en-
forcement of the cotton futures act.
Senator Smith, of South Carolina, in
troduced the first measure intended TO
force the New, York cotton exchange to
! give an honest contract and make honest
settlements of its cotton sales. Senator
/ Hoke Smith had charge of the measure
/ in the senate and assisted in perfectlng
7 the measure which is regarded as am
pie to meet all requirements II 1t is
properly enforced.
Since the middle of May both senators
have been actively investigating cotton
exchange methods and they have been
( promised by the department of agricui-
/ ture that there will be an Improvement
| in the situation
| II believe" said Senator Hoke Smith,
! that the department will vigorously
/ press its inquiry and that by the time
! the next crop is ready it will be lmpoS-
! sibIe for spectators to force the eX-
change prices below the value of spot
| cotton
Would Have Fallen Below
| The senator's agree that if the law had
! been property enforced New York tu-
turc dealings in the present crop would
/
| Since the middle of May, by direction
| of the secretary of agriculture, repre-
sentatives of the department have been
| vigorously investigating transaction on
| the New York cotton exchange 1t mas
| been found that quantities OF cotton
have been rejected under the act regu-
| lating cotton exchanges. ."..
Section of the cotton futures act
nrovides that cotton that, because
! =. of ma of
any character or Irregularities or defects,
| is reduced in value below that of good
| ordinary. or cotton that is below the
| Q rade of good middlinS, or, If tinged cot
! ton that is below the grade of low MD
| ding, or. if stained, cotton that is be-
| low the grade of middling, the grades
| mentioned being of the official cotton
| standards of the United States. or cotton
| that is less than seven-eighths OF an
! inch in length of staple. or cotton OF
perished staple or of immature staple
! ar cotton that is gin cut or reginned,
or cotton that is 'repacked or false
hacked or mixed packed or water
! packed shall not be delivered on, un-
! der. or in settlement of such contract
While the cotton futures act permits
| cotton to be delivered on sales upon the
exchanges of a few government grades
below .middling," it requires payment
| of the actual difference in value between
| these grades and "middling." These
! GRADES below "middling," when kept up
| TO the character required by section OF
| the act lust quoted are all good spinabfe
| cotton. -.,. ..
| II is true that these grades below
middling have not been selling at nor
| NAL prices on account of the tact that
the large quantities of cotton being USED
| by the government and the government
agencies in their contracts for manutac-
| tured goods are all required to be OF
! high grades.
Prices Forced Down
| Still for transactions during the
! months which. apply to the gathered
cron a tender upon thee New York cot
! ton exchange Of good ordinary cotton
which is four grades below middllng
| should recognize the full difference on
the market of these grades and the pur-
chaser should receive. it at the price
at which he purchased "middllng on
the New York cotton exchange less that
| difference The difference in the mar
ket between "middling" and good ordl-
nary" has run as high as $3.50 per
/ hale If sellers on the New York cot
ton exchange sold middling at "a cents
| mound the buyers were entitled to re-
ceive good ordinary" cotton of the high
character required of Section five of the
act. at SIS points below "a cents a
mound. that is to say, II Ia cents per
pound. This good ordinary" of nigh
class was worth on the market in actual
spot sales an average of cents pound
more than this price.
Referring to this fact Senator Hoke
Smith said:
eff the act regulating the cotton ex-
changes had been fully enforced it would
have caused sellers to lose enormously
unless they put up the price to the
prices at which actual spot cotton was
selling.
Il have vigorously urged this fact
upon the department of agriculture, ana
I am advised by officers Of the depart
ment that they are now rejecting much
of the cotton being offered upon the eX-
change.
Had not been so occupied upon the
military affairs committee of the sem
ate l would have asked for special
committee in the senate to investigate
the subject, but as l could not serve
upon the committee l have only pressed
the matter upon the department OF ag-
riculture and have demonstrated TO
them that some laxity of enforcement
of the law has permitted prices upon the
exchange to be forced below spot mar
ket prices.
Buying Higher Grades
"Of course trading the, future crop
can not be controlled by spot prices
1t is based upon the estimate of the
size Of the next crop. The department
accounts for the fact that good spinable
cotton below middling is selling at
lprices so much below ''middling" from
the fact that our own government and
foreign governments have been buying
exclusively the higher grades. l am
aware of the fact that substantial
part of the last crop consisted of grades
below "middling." | have had the de
rpartment OF agriculture prepare letter
showing the real value of these lower
grades of good character cotton and
have brought that letter to the atten-
ton of the government officials and all
BUYERS for foreign governments and
have urged upon them the importance
of modifying their requirements in their
purchases.
still. I am sure if the act regulat-
ing cotton exchanges had been enforced
the sales at prices below those Of spot
cotton would not have been made"