Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1924-08-07
SOUTHERN DELIVERY
ON NEW YORK URGED
BY COTTON REPORT

WASHINGTON, Aug. 5.-The
federal trade commission, IN re-
port made public Monday on the
cotton trade in response to senate
resolutions. recommended that some
form of southern delivery on New
York contracts he adopted, that cot
ton contracts be confined to three
grades, that consideration be given
to a. reduction in the size of the
contract delivery of 100 bales, and
that cotton puts and calls be abol'
ished by a prohibitive tax.
The commission contended that
the three contiguous grade contract
should not be adopted unless south
ern delivery also was adopted. The
report declared such q contract
would prove a valuable adjunct Of
southern deliveries by offsettlnG In
part the decreased value OF the con
tract arising from the additional op'
ton given to the seller of contracts
as to place of delivery.
1t would further counteract the
depressing effect on future prices
of deliveries of varying grades on
Zach contract, which tends to be en-
2hasized by the number of delivery
Fbints, the report held. This form
Oh CONTRACT also WOulQ II 1llOA
practicable for the smaller mer-
chant to take delivery of cotton of
future contracts, thus reducing the
tendency to run from delivery no
tees, the report added.
Another valuable feature of the
three-contiguous- grade contract, the
report said, would be the increased
serviceability of the future market
for hedging by improving through
the increased merchantability 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 delivery, inspection
and certification of cotton at south.
ern ports be under rigid government
supervision and that deliveries be
only from warehouses licensed I'M
der the federal warehouse act, and
that the tender of cotton on futures
at New York be no longer permit
ted.
A reduction in the size Of the de-
livery would make the contract
more merchantable and at the same
time would permit closer hedging,
the report said. The commission
pointed out that cotton puts and
calls are prohibited by the rules of
both Gotten exchanges, those at New
Orleans New York. and should
be eliminated by prohibitive tax,
like that now in force for grain puts
and calls.
To establish accurate spot quota
lions, the commission recommended
tnat uniform procedure be adopted
Tor determining quotations and diff
1erences; that all pertinent price in
formation be reported for overy spot
sale and be made the basis for spot
quotations and that this informa
ton be verified by a committee OF
competent classers, preferably no:
engaged in the trade. In view of
the disparity in volume of sales
among the several markets. the
commission suggested consideration
OF the feasibility of taking a weight
ed average of their differences III
stead of simple average for use N
the settlement of the future con
tract.
The commission advised agains
abollshing the New York futures
market on the grounds that New
York has important advantages
over any other city and is the finan.
clal and trading center of the world.