New-York tribune., 1922-03-08


Cotton Dealing Explained
The witness answered By saying that
IN 1920 the cotton crop was 1900, 900
bales and that during 1921 the New
York Cotton Exchange traded in be
tween 50,000,000 and 60,000,OO0 bales.
Asked to explain why the New York
Cotton Exchange could not handle
units OF less than 100 bales, the wit
ness said:
at would be dangerous for any little
producer to deal on the New York Cot
ton Exchange, unless he had abundant
resources and credit. He must have at
least $4,000 free capital in order to
protect himself in the fluctuations in
the market aud in order to supply
capital to protect his margin every
day"
"In other words, remarked the
Chief Magistrate, ''the speculative
danger is SO great the small producer
should not play the game"
Mr.. Marsh replied that the producer
could not lose If he had financial re-
sources to sec him through.
The witness said he did not know,
aside from hearsay, that another cot
ton exchange existed in this city, III
which cotton could be dealt in in
quantities less than l00-bale units. NJ.
Massey said, for the benefit of the
court, that the American Cotton Ex-
change traded in tenbalc units and
that during November il had dealt in
100000 bales Of cotton.
Insect Might Shut Exchange
Chief Magistrate McAdoo was inter
estcd in learning what would happen 10
the New York Cotton Exchange if the
cotton crop we're eaten up By the boil
wcevil OF bought up and held By John
| d. Rockefeller, Mr.. Marsh said the
exchange would close its doors the
next morning
Asked by MIR. Battle 80 give defn'-
expert said il was slang phrase aad
cotton when the owner did not want to
sell. To be "squeezed,' the witness
said, was Improbable.
In response to q question by Mr.
Battle. M Marsh said that the New
York Cotton Exchange did not report
10 the public daily the actual number
Of bale transactions because the rule
had proved inadequate.
"Why should it be any more difficult
for you TO report your days tradings
| than the New York Stock Exchange
which renders daily reports ." inquired
Chief Magistrate McAdoo.
at is difficult to get an accurate re
port OF the volume OF business" the
witness responded.
When Mr. Marsh explained that the
New York Cotton Exchange had only
432 members and the chief magistrate
had suggested that it peHalize members
who refused to support transactions,
the Witness replied that the advisory
committee Of the exchange Was unable
TO examine the books CT members be
| cause the courts had intorvencd.
Legislative Aid Suggested
"Why don't you ask the Legislature
as a protection TO the publc?" de-
manded Chief Magistrate McAdoo
IL can't answer that question: said
the witness.
Mr.. Battle suggested that tho stats,
tica could be available by duplicating
the compulsory reports Of the internal
revenue department.
Gould you make it . rule that they
give you d duplicate copy?' asked the
court.
@Wo could not force them" Mr..
Marsh replied.
Chief Magistrate McAdoo, that you
is not a criminal one. that they should
be afraid to send in their reports"
Mr.. Marsh was asked TO explain tho
operations Of the clearing house, which
is q third party connected with the ex-
change. and which, he said, was for the
purpose Of closing transactions daily.
"Ihe statistics Of your volume Of
business are available there" said the
magistrate.
81 know replied the witness, "but
the clearing house is under the strict
est injunction of secrecy 1t never dis
closed the business of members. Its
institution was impossible until it was
contracted that it would not disclose
business"
Another Firm Collapscs
While the general bucketshop invcs-
tlgatlon took this new turn yesterday
another stock brokerage house col