The Birmingham age-herald., 1920-04-08

ence of 10 cents Ser pound between spots and futures. If the farmers or
 the south had had no money in bank on
 which to hold >their cotton this past month and year their spot marker would have followed the futures down te 30 cents, as it has always dones More power to Senator Conner am not through yet.
 The exchanges have very strong lobby here. being directed. I under- stand by MT. Calvin, who is using nis relation to the official cotton people to make more effective his lobby in the interest of the exchanges, They are the farmers; the exchanges are th9 farmers he is representing.
 You will recall that prior to 30 days ago the New York exchange market was running from to 1 cents per pound cheaper than the spot market. that occasionally a spurt of selling would take place trying to break the spot market. They did that They tried hard to break it. This species ot. guerilla warfare will be entirely de- feated if the exchanges have to deliver one-half of 8 contract middlng ana above instead of, as now, all the con tract their selection from the most un- desirable grades. You understand that a large per cent of the mills do not use anything below middling.
 That is true. A large part of the crop is above middling The exchange selection for delivery is made not as an agricultural commodity or man ufacturing commodity, but as 3 specu- lating commodity
 Of course, this makes it to the greater advantage of those mills that use the grades below middling. mean the pres ent exchange contract, as they have no trouble in hedging. To mill or dealer strong enough to play the game, par ticularly those mills which could uss any grade, can go right into the mar- ket and buy the ahead months, and as the months come due demand delivery of the cotton and have ability to pay for it, unless the party on the exchange is willing to deliver the contract on basis of spot value. They always pros tect themselves. It is the other fellow who cannot do it. But in the future market, as at present constituted the small trader and the public at large the producer and the small spinner who always get run out of the market on the threat of tender-wil always be at the mercy of the smart fellows on the exchange organized as against the unorganized public, and the amend- ment will certainly help protect thess small users.
 The cotton exchange men know t1 claim that the privilege of rendering low grade cotton on contracts would furnish a market for the low grade cot- ton carries absolutely no truth. There is not a word of truth in it. In the years past when any grade could bs rendered, we have seen cotton contracts selling at anywhere from 25 to 50 per cent off middiing cotton. The only low grade cotton that is ever accepted cn an exchange contract has merely been that some big operator could ac- cumulate a supply of it and hold it in hand at New York or New Orleans for- ever as threat to tender and so de- press and keep depressed the market
 Of course, in all important legisla- tion defending the public. there arg scare heads. tEreats, and bullies, and all sorts of dire prophecies resulting from that species of legislation. You will remember that when Columbus was trying to get ships to sail west on voyage of discovery and all througn the voyage, until land was found, there was every dire prophecy of impending evil and disaster held out.
 It is the same way about this propo- sition here. It is simply a scare head scare head that ought not to fool anybody. I am sorry it does fool some people. Are the exchanges competent advisers as to how they should be con- trolled? Should Congress lay down thd regulations to protect the farmers, lna dealers, and the manufacturers, Of should the exchange do it? Should they be left to what the exchanges advise. Cotton speculation as practiced through the exchanges and abundantly borne out in their history has practiced 3ths most outrageous swindling methods yThe value of cotton not only to thd south not only to America but to tha world is too great to be bandied around ,oI,r it to this great international product to fulIv protect it.