The Birmingham age-herald., 1923-11-07
COTTON INDUSTRY
 PROBE UNDE RWAy
Liquidation Of Future Con- tracts For Cotton Both Ad-
 vocated And Opposed

WASHINGTON, Nov. 6.-Llquida- tion of future contracts for cotton at designated points in the south was both advocated and opposed by wit nesses at the opening session today of the federal trade commissions in- qufry into the cotton industry.
 The proposal was favored by W. l.. Clayton of the Houston, Tex, and New York Cotton exchanges, and Randau N. Durfee of Fall River, Mass, member of the national as- sociation of cotton manufacturers and the Fall River Manufacturers asso- citation. Mir. Durfee, however, said he was not in favor of elimination de- liveries at New York and would op- pose the whole if that was con- templated.
 The southern delivery plan and other proposed changes in the Cotton Futures act, were opposed by D. $. Butler, president of the New Orleans cotton exchange; H. M. Rankin and E. C. Glenny of the same organization; C. A. Gordon of the Savannah, Ga, exchange: B. E. Harris of the Calves ton exchange and Thomas J. Hogan of the Norfolk and Portsmouth, Va, eN- change.
 would reduce expenses of handling cotton for delivery on contract and be of advantage to both producer and consumer, while those opposed to 1t argued it would prove disadvantage ous 10 all concerned.
 Contract Advising Opposed.
 Mr. Rankin with other opponents of a system of delivery at southern of a svste moi delivery at southern points would give large dealers an Opportunity they do not now possess to accumulate great stocks of cotton at places where they own warehouses and use them to drive down prices Il \ ? pressed by MT. Clayton, that New York was not spot market saying that it not only was such center but was improving as one.
 Revision of the present contract was generally opposed by the wit nasses, Mr. Rankin arguing that greater restrictions on deliveries, such as limiting contracts to even running" or three contiguous grade asreements or specific grade obliga- tions. would rob the grower of the benefits of the present form.
 such restrictions, MT. Glenuy said, would gradually dry up the futures market because merchants would pc unable to deal in them due 10 the conditions under which future sales are made. while Mr. Gordon contended if the contract market was made more and more difficult for dealings the en- tire hedge business of the country would be transferred to L1YerpooI'
 
 southern delivery plan would bring about more widespread eertltlca- tion of cotton by government grAaers' which, he said, would bring haNoc in the prices of various gra1es ol mills by merchants, due to the re- stricted deeds of the spinners. AS to the method of establishing differences in then rices of various grades or cotton he favored that of New HorR which averages the differences aI "
 be O1ittee con sideration employed at the New Or- leans exchange.
 Fears Consequences.
 MT. Harris predicted grave anu danperous consequences" to the gen eraI cotton trade if changes were made in the law in the direction, of further restrictions. The proposal that three forms of contract be estapllsneu' he said, might destroy the future trading market and would aid the shrewd manipulator. It would pc fatal. he declared to permit dehVery on New York contracts elseWnere than in New York and would reduce the value of contracts without ellin mating manipulation.
 Mr Durfee said that under present conditions of delivery in New fork' U was "easy to execute corner anu urged that contracts there shouIq oe protected by an adequate amount oA actual cotton in stock.
 He took issue, he said, with many other spinners as to the necessity for inc New York exchange, many or whom he declared, would like to see If abo1ished because it doesn't protect ihem as it should" He thought, how ever, that it could be made safety device for the manufacturer as well as for the producer.
 The hearing is expectd to con .i,,,n for ahout three days. It is being held in response to a resolution in troduced by Senator Smith or South Carolina and adopted last winter