Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1919-02-18
Cotton on Specified Grades.


Cotton on Specified Grades.
Among the farmers who are begin
ming to understand the matter, there
Is a growing sentiment in favor OF de-
ma.ding of congress that the New
York and New Orleans cotton ex-
charges be required to restrict their
dealings in cotton to specified grades.
AS matters have always stood, the
exchanges, do not pretend to provide
for dealing in specific grades OF cot
ton: but simply in cotton. and such
real cotton as they actually deal in is
absolutely ft for nothing else in the
world other than the thing for which
it Is used-fixing the price Of real cot
ton far below the value of the same.
For instance, there is now in New
York, held among the gamblers, some
two or three hundred thousand oales
of dog tail stuff which, although &C.
casionally it may change ownership
seldom If ever changes even from one
warehouse to another.
The ostcnsible office Of the cotton
exchange Is to establish the price OF
cotton on a basis of supply and de-
mand, and while it really docs ex-
ercise a most tremendous influence in
establishing the price of cotton, it can
moi be Justly credited with depending
to any considerable extent on the re-
Iation of supply and demand. In
most of its methods it Is too devious
tor the comprehension of, the ordinary
llayman, or for anybody else, for tha'
matter except the sharpest OF the
sharps among its membership.
II is a rare thing that any or the
people who buy and sell future con-
tracts for the public have anything
whatever to do with actual cotton
They are not supposed to gamble; ou'
their only business is supposed to De
to execute commissions in the buying
and selling of contracts for people
who are doing the actual gambling.
Presumably the office of the ex-
changes is to facilitate TRANSACTIONS
between spinners, cotton merchants
and farmers; but really and truly TINS
obviously legitimate function Is
myth. and actually the cotton ex-
changes perform about the same ONCE
IN relation to gamblers in cotton that
faro dealer performs in relation to
gamblers in money.
It 10 an absolute fact that the COTTON
spinner cannot buy his cotton on tns
New York exchange. He can do II IN
theory, but that is all because the NE"
York exchange does not deal IN cotton
that the spinner can use.
For instance, suppose spinner
should buy one thousand bales OF COT
ton from a broker on the exchange Oh
contract for future use. Right no"
the exchange price is about % cents
pound, and that is the price at whlcn
the broker would place the order o'
the spinner, The order Is placed, say
for Nav delivery. On the 25th OF
April, the spinner must demand ths
cotton. and the broker, or ratner the
men from whom the broker Is suppos-
ed to have bought. has until the last
day of May in which to get IL up
There has been no specification Of
GRADES. however. The seller woulo
not think of putting himself into tha'
kind of snap. So when the time comes
for settlement, the 25th Of April so fai
as the spinner Is concerned II IL
agreed that the difference be PAID III
lcash-the difference in the exchange
ouotations on the day of sale ana the
dav of settlement. The spinner even
though he really wanted cotton, Is
forced TO this alternative for the reason
that otherwise he would be loaded with
cotton that could not get rid OF ex-
ccpt by putting it off on some o'hef
sucker like himself.
In order to cure this situation sena'
tor Smith not long ago introduced d
bill which bill will probably never
pass, requiring the exchange 'o
moke deliveries on a basis OF five
Grades, two above middling and TWO
below middling. :,
The enactment of such a law woulo
help: but it does not go far enough.
There are between twenty and thlr-
tv different grades of cotton-for the
moment we do not remember the ek-
oct number-and Of course the ex-
change would be prohibited from deal
ing in all the grades that are not IN
cnded in the Smith specifications.
The main thing that the Smith Dill
would do would be to outlaw that ao-
solutcly worthless trash that Is no"
beine used for gambling purposes; but
obviously it would leave the way open
for the accumulation Of other cotton
that would serve the same purpose.
But If congress would require the
natrons of the exchange to buy sell
and deliver actual cotton on specific
grades. the present outrageously alb
surd condition would be cured, and
the exchanges would become real
helps both to the cotton spinners and
the cotton producers.
The spinner would go to the cotton
exchange with an order Tor l'oou
bales of cotton Of specified grade and
no man on the exchange would dare
undertake the execution of such an or
der unless he knew where he could
Law his hands on the actual cotton.
Suppose, for instance right no"
broker should sell 1000 bales Of cot
ton at today's price of about % cents
pound for April delivery, where would
he get the cotton for less than 80 cents
pound, If indeed he could get 1t al
that?
In the cotton convention In Column
bia last week there was proposed q
resolution to endorse the Smith bill to
limit trading on the exchanges to five
snacified grades, and the convention