New-York tribune., 1919-03-08
All Old Cotton
Contracts Must
Be Closed May /
New Law Governing Deal
ings in Futures Disturbs
Trade Relations Between
Shippers and Spot Buyers

Trading was more active in the cot
ton market Yesterday, but was again
confined mostly to liquidation or the
transferring of accounts from old to
new style contracts. 1t had been the
general impression that trading in
liquidation of the old-style contracts
would be permitted until the maturity
of all months involved, but yesterday
morning before the opening a ruling
was issued by the Bureau of Markets
that no trading whatever in old CON
tracts would be permitted after Nav |,
all dealings on the exchanges after that
date to be in the new-style contract.
This served to stimulate legislation.
Traders who had open accounts on
either side of the market were equally
desirous of closing out their old CON
tracts or transferring them to the new
style, with the result that orders were
pretty evenly divided, and the market,
despite some irreguarity, developed a
iirmer undcrtonc Closing quotations
showed an advance of 35 to GO points
for the old and 80 to 67 points for the
new~style contracts.
Reports Of smaller spot offerings in
the South helped TO strengthen the
market.
The change in the law governing
cotton futures trading has given rise
to many problems in connection with
transactions on "basis" or "call" be-
tween Southern shippers and domestic
spinncrs and exporters.
Advlces from Washington stated
that call transactions must comply with
the new style contracts as fixed by the
law.
Conferences between Charles j.
Brand, chief of the bureau; Judge
Graham, cotton futures attorney for
the Treasury Department, and other
officials have resulted in an informal
opinion, which was expressed as fol
lows:
"1hc question as to whether or not
there can be trading in old-stylc con-
tracts in liquidation of outstanding
contracts entered into prior to March
4, IS open to serious doubt from
legal standpoint. AS practical mat
ter we sympathizc with the trade in
its situation brought about by making
the amendment effective with approval
of the act instead of later, as original
ly contemplated.
"ln the circumstances no objection
will be made to bona tide sales or
purchases of old-style contracts for
the sole purpose of liquidation of &C
tually existing long or short interests,
provided such liquidation is accom-
and after which date all sales or pur-
chases on exchanges must be new-style
contracts.
I'm order that the Treasury Depart
ment may be constantly advised of the
situation it will be necessary for each
firm having any outstanding interest
on March to report either directly
or through the clearing house to the
cotton futures attorney at once its
exact position in each month, and to
report for each day the number Of
such outstanding interest until all
outstanding old-style contracts have
been entirely liquidated
with reference to call transac-
tions, an examination of the act fails
to disclose any language upon which
the government would be warranted in
basing the ruling that new trades may
be executed in oldstyle contracts pur-
suant to call transactions.'
Southern shippers were taking the
matter up with their customers yester-
new basis. There was little further
change in the difference between the
two contracts, with the new stvle show
ing premium of about to 72 points
at the close last night.
Exports for the day were 1874
bales, making 3,O33.250 so far this
season, against 2,831,725 last year
Southern spot markets, as officially re
ported, were unchanged to so points
higher
The local market for spot cotton
was steady and 80 points higher at
26.45c for middling, compared with
26.l5c the day before and 3320c the
year before. Sales of spot amounted
to 400 bales.
The range of prices for leading
months follow:
M n CrrVJ