The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1922-03-22
\ Rotten Business.
News and Courier.l

has been brought about by its enc
mics, including the New York Cot
ton Exchange and the New Or
leans Cotton Exchange. However
this may be, the inquiry before
Chief Magistrate William McAdoo
in New York has resulted already
in some exceedingly interesting dis
closures The conclusion is ines
capable-if the witnesses are to be
believed at all-that the trans
actions in cotton which took place
among the members OF the Ameri-
can Cotton Exchange reeked with
fraud and that customers were
fieeced in the most wholesale man
ner. Magistrate McAdoo asked
one witness whether the customer
az distance ever won. He
might with an honest broker"
was the answer, but he always
loses twice as much. The broker
always figures his customer as
wrong"
1t was testified that when cotton
went TO % cents last September
one concern received such a flood
of buying orders that they did not
have time to go through the for
mality Of putting their trades across
the ring, but a member OF the firm
simply sorted out the orders, filled
in prices and sent confirmation to
the customers. Ninety per cent OF
the business, witnesses said, was
done by brokers with their fing-
ers crossed The New York Tier
aid thus summarizes what IS meant
by this fnger-crossing system:
An order comes in from the
souta to an American exchange
broker for the purchase Of cotton.
The broker goes into the ring and
looks at the New York Cotton EN-
change quotations and offers to buy
at the last posted figure. Getting
no offer to sell he raises his bid
successfully until he feels he has
gone as high as he dare on his
customers money-four or five
points above the New York quo
tations-and on his next bid holds
aloft his crossed fore and middle
figner. Another broker with whom
he has specific or standing pre-
arrangement catches that signal
and in response holds up his cross
ed fingers and cries Sold
''At the end Of the days busi-
ness the crossed orders are made
out in bought and sold slips, one
transaction going into the brokers' S
books as the execution Of his Gus
toners order and the offsettins
transaction being recorded in a
dummy account. These registra-
tions make everything look all
right in the records of the Ameri-
can Cotton and Grain Clearing
House, so that the customer hasn't t
a chance to discover the bucketing
Of the order.
'No cotton is actually bought,
and, according to testimony, none
can be bought except in small
quantities on rare occasions"
The New York Globe declares
that undoubtedly the criminal as
poets of the situation which has
been disclosed will be adequately
dealt with by the district attorney
and in the courts. However. while
the law is adequate to punish such
ol, u C1, 70
ist this is not the only phase which
is Of Importance. "Tfe economic
menace Of the recent growth of
houses specializing in petty cotton
speculation is very great" says The
Globe" even when the law is being
technically observed. An inquiry
conducted by The Globe has shown
that the south is honeycombed With
agencies of firms which appeal to
the gambling instinct Of persons Of
small means. Speculation Of that
nature is doomed from the start"
Denunciation of the cotton eX-
changes has been a favorite pas
time in the south for q great many
years. Yet now we are told that
it is the south which has supported
the crooked brokers' The sequel
Of the finger crossing deals OF the
American Exchange brokers lies
south of the Mason and Dixon
line" says the Herald Various
brokers. formerly members OF the
American Exchange, told OF how
the American Exchange specializ-
es in southern clientele. One brok-
er said OF his hundreds OF custom
crs he had just two north OF the
Potomac river" How different in
this respect is the New York Cot
ton Exchange? 1t would be very
interesting indeed to know. 1t is
TO be hoped that the light VIII be
thoroughly turned on the opera
tions of New York Cotton Ex-
change also. What has been
brought out should help cure Il
good many southerners Of the
fever for gambling in cotton. II
the whole business could be thor
oughly shown up in its true lisht
tho cotton industry might be freed
of q lot of parasites which doubt
less have cost it far more than the
boil weevil ever did
~oe-
There's one thing about wireless
typewriters. If they don't make
good a man won't be tempted TO