The Birmingham age-herald., 1924-04-28
CHANGES URGED . IN SPOT CO!1rljN
 SALES METHODS
Trade c Comriiissibn Recon. mends Southern Delivery
 On N. Y Contracts

WASHINGTON. April 27.AReyi- sion. of strading practices oh the na- ticn's cotton exchanges is recommended by the, federal trade conniissipn in a report on the cotton. industry to be transmitted to the Senate tomorrow.
 The report made. public tonight is a response to a resolution directing the commission to investigate alleged vio- lations of the anti-trust laws by cot ton exchanges and cotton dealers, and the effect of such alleged violations on spot cotton prices. "
 The commission recommended revi- sion Iof grades 0f! cotton deliverable on futufe contracts, changes in the sys- temiof marketing spot cotton quotations | and differerces, delivery on New York future contracts at southern ports, and publication of the total volume of fu- ture and open trades. No proof could be obtained, the commission re- ported, on ciartes that cotton mef- chants have pooled their interests to manipulate future ptices. or of any at, tempt to-, restrict competition in the trade. is " ys
 .Contigious grade contract, 7 proyid- ing that delivery, on each contract shall be composed of more than. three adja- cent, or contisous grades of cotton, was recommended for futures dealings This system; the report said, should be used only on condition that the southern. warehouse delivery system is adopted.
 More accurate. spot d1otations, the commission claimed, would give through commercial differences for use in set clement of the future contracts, which make for more stable relation be- tween spot and future prices, and therefore for a better hedging market
 4 Uniform Procedure Urged
 Totsestablish accurate spot quota tions, jand correct differences, the com mission recommended uniformity. of procedure in determining thefh, that all pertinent price information be reported for every sale and be made the basis of the spot quotations and differences bye ms thematica1 computations, -' and that such information be verified by competent. elassers. The feasibility. of taking weighted, instead of, a simple average, for settlement of the future contract should be considered. { '-,-s :; Supboftihe. it's recommendation for some form ; of q southern delivery. in New York contracts, the commission shid sss,, is T. t Nait '-F sti:
 k 'The strongest argument for a .,fu- lures market is that it furnishes, q safe hedge for cotton merchants. This,, the New York market does not always do. In fact, fit is ,freQuent1y 1hanipulated, its, prices being forced out of line. ' It is a triism to- say that for some years past, the New York futures market has failed to perform satisfactorily its, flInc- tioh. .' ..f s;s2g '+i$ e3'e' ,f@' ,s:sThere are asserted objections to Abol- ishing the New York futures market. New York! has an important advantage over any !.otheE. city in the United States t 1t, is- the financial tard trading cefiterEof the world It is stated by some cotton merchants that New Or Jeans has; az hefter contact than New York in that delivery takes place at n | large spot mafEet; but the volume, of 1 trading in futures at New York Is much greater than that at. New Orleans. The commission. believes at this time that it is part of fgwisdDm to try, to retain the better sfeaturksj of the New York futures market. Mach of the. ground for criticism will be eliminated by the adnpti6n of some system of south et1i warehouse, deliveries. on New York contr6cts.3 Southern deliveries will do much to eliminate. manipulation, and naintaip New York future prices in their proper relation to. spot pricesr s' ,ts , Would Limit Points
 - The commission, recomfnended that, the number of southern delivery points be few, and 1t present, only Atlantic and gulf ports. ] 'sr 5F F: &5Y'-
 l-Deliyefy, inspection and certification of cotton at the southern ports should be under rigid goternment supervision and tender of cotton on futures at New York should be no longer permitted.
 The commission asked that coiisid- eration .bes Gitens to a. reduction in the size of Rhkscontfacti delivery (100 bales) :.
 The value ' of the presen. .contfact with cotton at 20 to- 30 cents '.seems entirely out of proportion with the val ue of. the deliveries on future ,cofitfacts fOrt wheat . corn and oats," said the re- port, adding that q reduction of the size of sthe delivery would fehtler the contract more lflerchantabe andsat the same time would permit closer hedging.
 The cohmission suggested that d pro. hibitiye tax on cotton puts and. calls" like. that now in force for grain be enacted, s'thus s.centributing to the elim- ination of such trading which IS now prohibited by the rules of both of the cotton rexehAhkes.si 7 % .f X,