New-York tribune., 1922-03-14
Cotton 'Cl1anec
IH
Head Ignorant
OF Its Routine
Augustus ". Graham Tells
Court He Doesn't Know
Source of Quotations of
American Organization
Refers Judge to Secretary
Paid Little Attention to the
Complaints, He Admits;
Another Broker Is Held

the American Cotton Exchange and a
former Judge in the South, was wit
ness yesterday at the John Doe cotton
investigation before Chief City Msgis-
trate McAdoo.
The elderly head of the exchange.
who was a United States cotton fu-
lures attorney before he assumed his
present position in September, 1919.
testified he knew little or nothing
about the routine in vogue on the floor
/ and across the ring" Most of his
time. he explained, was taken up In
handling the correspondence and liti-
CATION which the exchange had on its
hands and in purging the exchange Of
practices under its previous admins
tration.
Magistrate McAdoo expressed sur
prise at Mr.. Graham's lack Of knowl-
edge of the activities of the floor mem
bers. commenting: There seems to be
whole lot about the exchange you
know nothing about" The magistrate
remarked that it would seem that Mr..
Graham had been selected for the po-
sition because of his high reputation
and character, and not on account Of
any expert knowledge of cotton trading.
Doesn't Know Quotations Source
Mr.. Graham was unable to give the
source Of the exchanges quotations
and he admitted that he had paid scant
attention to r petition Of protest filed
January 2S by some Of the members,
criticizing certain methods. He told
of the expulsion, after he had become
head Of the exchange, Of its former
president, James C. Cooper, and the
| latter's sons, Robert l.. and Charles r.
Cooper They were ousted, he said, be-
cause of irregular practices and for
trading in membership certificates, an
issue which he said, was now in the
hands OF board of arbitration
He told also OF the expulsion re-
Gently of ". B. Wilson & Co. for
writing q letter to Holt & Laird, Of
Greensboro, n. c.. refusing to recon-
mend any brokerage house on the
exchange.
with the honor Of your exchange
and the safety Of its cl,etomers at
stake, why didn't you bring libel
action and have your disparagers ar
rested = asked Mag: s:strate McAdoo,
My idea IS" replied MIR. Graham,
THAI when this investigation is over wo
viii bring cha rges Of conspiracy against
those who are trying to hurt the ex-
change."
He added that he had been Informed
that Louis Brooks. a member of the
board OF governors OF the New York
Cotton Exchange. had stated that the
New York Cotton Exchange and the
Ne8 Orleans Cotton Exchange were de-
ternlined 10 crush the American Cotton
Exchange.
No knowledge of Bucketing
Mr.. Graham testified that, to his
knowledge, none OF the members of the
exchange INDUCED in bucketing. He
WAS the sole witness and was on the
stand for more than two hours under
questioning by Magistrate McAdoo and
Assistant District Attorney Jerome
Simmons.
At the outset Of tie session Magis-
tTate McAdoo said he wished t. cor
hension as to the scope of the in
quiry. '1 do not intend" he said, ito
make sweeping investigation of cot
ton speculation. We are concerned
only with the specific matter under in
/ quiry-whether state law has been
broken by bucketing
In his preliminary examination Mr.
/ Iranam sald That MS home was in Ok
/ ford, n. c., and shat he came to New
York about six years ago. The ex-
change, he said had about 800 members
scattered over the country as far south
as the Rio Grandc. There were about
twenty-five floor member brokers. trad
ing in minimum Of ten bales, and the
last seat OF the exchange sold for about
$500, he said.
Refers Court to Secretary
For much of the information the
magistrate desired Mr.. Graham re-
fcrrcd him to George ". Pratt, secre-
tary OF the exchange. On the subject
Of quotations Mr.. Graham said he un-
derstood they were obtained by men,
Der brokers. but he was in ignorance
as to how they were transmitted to the
/ floor.
"You are president Of the exchange"
said Magistrate McAdoo, land yet YOU
cannot tell us where the exchange gets
its quotations
"These matters are left entirely to
the exchange and 70 the individual
brokers" explained the witness.
Magistrate McAdoo suggested that
the quotations could not have emanated
from the spirit land. to which Mr..
Graham replied that be did not know.