Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1922-03-17
AFTER COTTON TRADERS
Affairs Of American Exchange Under
Inquiry.

Affairs OF American Exchange Onoer
Inquiry.
New York, March 13.-Criticizing
methods of operation of the Ameri-
can cotton exchange during the John
Doe" inquiry into its affairs today,
Chief Magistrate McAdoo declared it
appears that the exchange "had no
cotton on which to base its trading
unless its purchased across the street
from the New York cotton exchange"
"The American exchange purchased
$4,000 bales from the New York ex-
change simply for use by the brokers
in checking the wheel so it would stop
at winning number" he added.
These comments were evoked by tes-
timony of former Judge A. w. Gra-
ham, president Of the American ex-
change who spent the afternoon on
the witness stand.
Mr. Graham disclaimed knowledge
Of a petition, offered in evidence in
which exchange officials were advised
by members that "the state of trading
on the floor is terrible" following with
drawal of firm which customarily
had held 10000 bales to cover brokers
who sold short.
| The petition urged the purchase of
$1,000 bales to sell at opportune times
in the trading when the buyers de-
mands exceeded sales so far as to
halt trading and force prices upward.
Revenues Of the members were there
by doubled, trebled and perhaps
quadrupled," the petition said.
Mr. Graham was ordered by the
magistrate to present to the district
attorney tomorrow names of half
dozen Southern planters who bene-
flied by the chance to speculate, Of
fered with the opening Of the ex-
change"
This order was based upon testi-
mony that the exchange was founded
in the open market by using ten bales
as the minimum unit Of transactions,
thereby opening the field to smaller
growers eliminated from the New
York cotton exchange and the New
Orleans cotton exchange by 100 bale
minimum unit.
Questioned concerning the duties Of
his office as president Of the exchange,
Mr.. Graham testified he Opened the
mail presided at meetings Of the
board of directors and attended to liti-
cation instituted to rid the exchange
of certain rascally brokers'"
The witness presented little knowl-
edge Of the actual workings of the in
stitution. He did not know what
ticker service was used; how price
quotations were based; or how 1t
might be determined what cotton sold
actually was delivered, he said. He
was chosen president of the exchange,
he asserted, following three years as
an appointee of the United States
treasury department to enforce the
cotton futures act in New York. He
said he was the son of North Caro-
lima cotton grower, but that he had
no personal experience with cotton
and never bought or sold bale of
cotton on the exchange"
"In other Words" Magistrate Nc
Adoo interposed, you were elected
president of this exchange and drew
salary Of $4,000 a year because of
the moral effect upon it's customers
OF your name as judge and former Of
fetal of the treasury department"
Mr. Graham declared that several
members of the exchange had been
expelled recently on charges that they
had taken their customers money
without delivering anything for It."
Another firm was expelled, he said,
for knocking the exchange" in let
ters to customers throughout the coun-
try, warning them to discontinue their
accounts with the American exchange
on the ground that it was unreliable.
The witness also claimed to have
uncovered a plot of the new Orleans
cotton exchange to put the American
cotton exchange out of business.
The hearing will be be resumed to-
morrow.