The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1934-08-20
NATIONAL MART
FOR TOBACCO
ORGANIZED

NEW YORK, Aug. 20 GN.SO.
Tobacco, the third largest agri-
cultural crop produced in the
United States, will next month
be traded in on an organized eX-
change for the first time in its
history.
The historic and pecunious COM
modify has been bought and sold
principally on the loose leaf, or
auction floor. For years the dis
advantages of this antiquated
system have been admitted but
tolerated. Tobacco, which as an
industry pays the Government
almost $5O0,O0O,000 annually in
taxes, is the only major staple of
the nation without standardized
national market place.
The principal reason for the
backWardneSs is the subject of
grading. With each of the three
curing processes (air, flue, fire.
having numerous grades and
shares of its own, the loose leaf
system, it has been said, was
based on the judgment of the
auctioneer, the luck of the seller,
the guess of the buyer, and the
distribution of light over the floor.
Works Out Contracts
The Department of Agriculture,
by an intrinsic survey, has SIM
plified the method of identified
ton and description. Because of
this it has been possible to work
out original and definite con-
tracts for use on an exchange
On or about September Is, the
New York Tobacco Exchange, Inc,
will open its doors for trading
with roster of about 80 members.
Exchange officials expect the
membership to soon reach 100.
The maximum placed by the board
OF governors is $50.
For the first time, buyers and
sellers will have the opportunity
of hedging" against their COM
mitmentS on a futures market.
This, according to officials, may
gradually do away with the stor-
ing of hogsheads of tobacco in
warehouses. Large users of to-
bacco employ this method to guard
against the fluctuations in prices.
Aid of Experience
One advantage accrues to the
Tobacco Exchange. 1t has the
records and experiences of other
commodity exchanges to COM
pare. Trading will be on the same
principle as the Cotton Exchange,
with IL future months. A spot
market will be inaugurated as soon
as possible.
The bacco belt" closely
matches the cotton area. 1t lies
mainly in Kentucky, Tennessee,
the Carolinas, the VirginiaS, 1ndi-
ana, Ohio and Georgia. Certain
grades are grown in New England,
Minnesota, Wisconsin, Missouri,
Pennsylvania, Florida, Alabama
and Louisiana.
The total area covered is esti-
mated at almost 100000 acres,
with an annual production of |
about 1,400,000,000 pounds. The
crop has a farm value of more
than $300,OOO,O0O as it comes
from the plantations and more
than a billion dollars in its fin
ished manufactured state. Tobac-
CO ranks fourth in value among
our exports.
An Old Story
The most widely known and |
grown grade of tobacco is hurley,
from which cigarettes are manu-
featured. A story told many
times has it that a Kentucky |
farmer planted some Tennessee
seed. The seedlings were of a
'sickly" color and the farmer
pulled them out of his crop. A
shortage of seed the next year,
however, induced him to try again
and this time he let the plant |
grow.
When taken to market, the
strange tobacco sold for many
times the current market price to
an "experimentor." The Wortni- |
ness of the hurley was soon estab-
lished and its planting surpassed |