The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-03-06
COTTON EXCHANGE
OBLIGED TO CLOSE
Confusion in Interpreting New
Futures Law Results in
Days Suspension.
NEW ORLEANS NOT OPEN
Contract Changes Caused by
Act Necessitated Action
of Directors.

from the passage by the Congress Of the
new futures law as rider Of the wheat
guarantee bill trading in cotton was sus-
pended yesterday in the cotton exchanges
in both New York and New Orleans. At
first 1t was thought that the new form
Of contract made necessary under the
new law could be made ready in time to
begin business about noon but II was
later discovered that the change was too
great to permit OF all details being
worked out in such a short space Of time
and II was decided to suspend trading
for the day. Just before noon II was an
nounced that the New York Cotton Ex-
change would not be open for, business
until this morning at 10 o'clock Similar
action was taken by the New Orleans
Exchange.
The closing Of tho exchange was ne
cessitated to avoid confusion" said Pres
ident johnson of the local exchange In
an interview yesterday afternoon. The
grades which may be delivered In full
filment Of the new contract" he con-
tinued. are those whose values are not
below the value of low middling cotton.
Seven grades are specifically prohibited
for delivery under the new contract and
at the present time a delivery Of two other
grades Is prohibited because their value
10 pcioW tHo Ndluo VI low IUluulilS. CH-
der the old contract cotton could be de-
livered which was not below the value
OF good ordinary. At present delivery OF
good ordinary Is 8 cents below the value
OF low middling. 1t is unfortunate that
the change was made effective imme-
diately. as this necessitated the closing
OF tho exchanges to avoid confusion"
President johnson was asked II he
considered the new law in any sense a
restriction on trading in cotton but he
said that he did not view It in such a
light
Resume Trading To-day.
When trading is resumed to-day It will
be in new style contracts, except for pur-
poses of liquidation. for which trading in
old style contracts will be allowed. I'm
der the old regulation twenty separate
grades OF cotton could be traded in. but
that number has been reduced under the
amendment to thirteen. kilograms were
sent to the New York and New Orleans
exchanges yesterday by Charles J.
Brand. chief OF the bureau of markets
who is In charge OF the enforcement OF
the new law, in which he said that "all
future contracts on both exchanges will
hereafter be new style"
The telegram then explained that this
means the elimination from trading o.
seven grades namely; strict good ordi
nary and good ordinary white, strict low
middling and low middling yellow tinged
middling yellow stained. strict middlint
and middling blue stained. Also" th,
telegram continued. 'all spot cotton de
livered on new style future contracts will
be classed by the Government. Spot cot
ton delivered on old style contracts viii
be classed by exchanges as heretofore
with appeal to the Government until sucl
old style contracts are liquidated. Al
orders for execution on exchanges SHOULD
specify new style contracts Further
more, similar action will be necessar.
| with reference to orders previously trans
| mitted but not yet executed Bona nd
| liquidation OF outstanding old style con
| tracts will be permitted so long as NJ
| new trades in old style contracts ar
| originated"
A suggestion was made by the mana
gers of the exchange that its member
| telegraph clients as follows:
| To Use New style Contract.
| lowing to the passage OF an amend
| ment TO tho URited States cotton future
act, effective to-day. you are advised tina
no trades may be made under the term
of the former act except in liquidation
OF contracts existing. II your order 1
in liquidation please so state in ever
case. Otherwise your order will be exc
cuted under the provisions OF the Unite
Stats cotton futures act as amended o
in what Is termed the new style con
| tract"
| The following statement was give
| out by the managers OF the New Yor
Exchange at noon: The contract here
matter referred to as the old contract |
any contract made prior to March 4
1919. and the new style contract is
contract made after March S, 1919.
From the opening on March 6 an
thereafter trading in old contracts wi
be confined exclusively to the lIQuidatio
OF contracts existing. There Is no neces
sity for an immediate closing of existin
old contracts and those having old con
tracts open may lSquidate them at an
time before maturity. On March 6, 1911!
trading in the new style contract will b
| inaugurated.
Contract slips covering old style cor
tracts shall be plainly marked 'ol
style
| "All bids and offers across the rim
unless the word old is used shall
understood to be a new style contract.
Members are requested as far a
possible not TO accept orders TO trade 1
new style March contracts"
COTTON STATISTICS