The Birmingham age-herald., 1924-08-05
TRADE COMMISSION
 MAKES ITS REPORT
Three Contiguous Grade Selling Is Also
 Recommended
PROHIBITIvE TAX IS SUGGESTED
Commission Advises Against AbOlishment Of New
 York Futures
iRv Asaociatad Press.l ]

WASHINGTON, D. C., Aug. 4.--- The federal trade commission, in report made public today on the cotton trade in response to Senate resolutions. recommended that some form of southern delivery on New York contracts be adopted, that cotton contracts be confined to three grades, that consideration be given to a reduction in the size of contract delivery of 100 bales and that cotton puts and calls be abol- ished by a prohibitive tax.
 The commission contended that the three-eonti tiguous- grade contract should not be adopted unless south ern delivery were also adopted. The report declared such a contract would prove a valuable adjunct Of southern deliveries by offsetting in part the decreased value of the contract arising from the additional option given to the seller of con tracts as to place of delivery.
 IL would further counteract the de- pressing effect on future prices of de- hyeries of garying grades on each con tract, which tends to be emphasized by the number of all delivery points, the report held This form of contract also would naake E mere practicable foE the a1aM zse ant 10 ale nal1Aaeg q cotton on future contracts thus reiue- ing the tendency to run from delivery notices, the report added.
 Increase SerVieeabitity
 Another valuable feature of the three contixuous-grade contract, the report said, would be the increased merchant ability of the delivery the relationship of spots and futures.
 The commission recommended that only a few southern delivery points be selected and that they be confined to the Atlantic and gulf ports; that the de- livery, inspection and certification of cotton at southern points be under rigid government supervision and deliveries De only from warehouses licensed under tender of cotton on futures at New York, be no longer permitted.
 A reduction in the size of the de- livery would make the contract more merehantable and at the same time would permit closer hedging, the report said. The commission pointed out that cotton puts ana caAi5 are prOnlDtLSu ny the rules of both cotton exchanges, those at New Orleans and New York, and should be eliminated by prohihi- tive tax, like that now in force for grain puts and calls.
 To establish accurate spot quotations, the commission recommended that uni form procedure be adopted for determin- ing quotations and differences; that all pertinent price information be reported for every spot sale and be made the basis for spot quotations and that this information be verified by a committed of competent classers, preferably not engaged in the trade. In view of the disparity in volume of sales among the several markets, the. commission sug- gested consideration of the feasibility of taking n weighted average of their diff ferences instead of a simple average for use in the settlement of the future con tract.
 The commission advised against abol- ishing the New York futures market on the grounds that New York has impOr- tant advantages over any other city and is the financial and trading center of fhp world