The Birmingham age-herald., 1920-07-30
.COMER ANALYzES COTTON MARKETS
 ODD QUOTATIONS
Says Gambler Manipulators Arrange Matters to Get Profits, Leaving Spot Cotton and the Farm
 CTS in Lurch

senator b. b. COmeT III dn dHdiy SIS of cotton market quotations. says:
 "On July p, in large headlines, the papers state. New York July contracts advanced to 4Sc, new high record, within IS points of the record made in March On Friday. the 2Sd also in large headlines, 1t is again stated, FIX citement plentiful in New York cotton trading, staple fluctuated between record advance and sensational drop in last hour of trading, July going to 4S.75c, or 57 points higher than ever before.'
 Heading this. an uninformed party would think that the cotton market was greatly excited, very bullish. ani had made sensational advances, out of which the holders of cotton would reap big benefits and the growers of cotton would have great expectations. The very contrary of this is the fact "On June 25, the second tender day for July contracts, July New York was selling S5-5oc. while spot cotton was 40.50c, the contract market being 5c per pound lower than the spot market in New York. On July 23, the last notice day for July contracts, July was selling. 4S.75c, or $41.25 per bale higher
 than on June 25, and spot cotton had not advanced penny.
 THE GAMBLERS
 ae on the NtW | OTk tA- change, notwithstanding the Smith . Lever bill. made for the protection of legitimate business, on June 25 hai New York exchange cotton sc per pound cheaper than spot cotton. On July 23. the same gamblers had the same contract SA higher than spot cotton and in these great variations spot cotton had not advanced a penny, and legitimate holders had not been T ta rrn1 a,,l ha fa 1ar'S prospect for present or future cotton had not been increased a cent. The same people who put July con- tracts to 43.7oc now have october con- tracts, the next active month, 32.50c; March. 29.05c, and May, 2S.45c. s'With the present values for middIing cotton around 4Oc, the farmers crop now growing and still in all the uncertainties of wecvns and other damage, is be- ing priced by the bear gamblers on the exchanges at less than 30c per. pound, and there is no legiti- mate interest that dnres to buy l these contracts, stabiiixing the market and supporting values be- cause there is no certainty either as to the grade of delivery or the 1 differentiaIs between grades. and this leaves the pricing of the
 sOuth's great crop in the hands of 1 buccaneering exchange bear gam bIers without fear of selling them- l selves into n hole.
 "The New Orleans exchange, also under government jurisdiction, Smith | Lever bill, bureau of markets admins | tration, was on June 25, the second i tender day for July contracts S5 COG
 basis middling. and on July 2S, the last inotice day, 35.74c basis middling, a. both dates AZ c pound, $22.50 per bale | lower than spot middling.
 "In other words. within the law the gamblers had taken the New York con | tract market and in thirty days pulled
 it from 5c below the price of spot mid ding to 3Ac above the price of spot middling. They had taken the New Orleans contract market and through out the whole month of July 'beared | the contract market, making the ex- l change price basis middling 4c per l pound cheaper than spot middiing. | "In the New York case the change had been Sc per pound. or $40 per bale | up. in which legitimate interests in
 cotton had not shared the benefit, | could not share the benefit. Tn which q legitimate dealer If he had bought | 5000 bales spot cotton and hedged by 1 selling 5000 bales on the New York
 market. would have lost $200,000 on | the contract market, and his spot cot ! ton would not have advanced a cent. | s"The July record of the exchange market is actual evidence thnt the 1 Smith Lever bill, under the ad- | ministratiOn and supervision of the agricultural department, bureau of | markets, the exchange price both 1 of New York and New Orlen7s cnn | vary so widely, fIuctuate so much, l that they lose relation to the price | of spot cotton and absolutely de- | stroys nII legitimate business l transactions on the cotton ex- 1 changes, which evidences that the l law has failed to accomplish it's l purpose. that purpose being the I stabiIixing of contract value on l spot value.
 | "The Conner amendment requiring the delivery to be one-half middlins and above and that the delivery in each contract of 100 bales be not less than twenty five bales of each type would greatly relieve the situation. but if the proposed amendment was changed so that all contracts should be sold basis actual middling, cutting out the possibility of the assembly or l off grade cotton at differentials that | no law or power can correctly estab- 1 lish, then the exchange market would | function on the spot market. This law could be amplified so that whenever q | | clement shall be made at the cost of delivery of spot cotton plus some little peuflty of 25 points.
 THE AMENDMENT "If the first amendment was adopted, 1 1t would tend to make the basis con- tract function on middling cotton. or course it would be weakened by the power to deliver the one-half of un ; desirable grades at fictitious differen- .l 1ntt vA Acpd dr,oQ nf xU a a adopted. it would inevitably make the contract cotton as high or slightly higher than middling and all grades above or below. would function on the
 supply and demand price.
 "This would constitute a business
 contract which would encourage every
 legitimate business to patronize, as ir
 would be a protection instead of pit-
 fall.
 .'The gamblers on the cotton exchanges
 opposed the Conner amendment, creat
 ing prejudice against it by calling 1t a
 spinners S contract, i. e. will give the spin
 Ter undue advantage in the buying of