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SENATOR HOKE SMITH
ON COTTON GAMBLING
Attack* Method* of New York Ex
change, and Hie Amendment le
Adopted by the Benate.
There is widespread interest in the
South over the determined movement
in congress to break up tiie methods
of the New York cotton exchange,
which depress the price of cotton
While it is generally understood that
the system of doing business robs the
cotton growers of millions of dollars
annually only those who have had
dealings with the exchange or who
have studied its methods know how
it Is done. It is accomplished by per
milting the seller of cotton futures, if
actual cotton is demanded, to tender
Inferior grades of practically valueless
cotton and to compel the buyer to ac
cept It or to settle on an arbitrary
basis which would cause u loss in
many liutances of as much as 15 a
bale.
The effect of this system is to cause
quotations on futures to be usually
about three-quarters of a cent a pound
below the actual value of spot cot
ton. Tills statement can be verified
on any day by an examination of the
New York quotations on spots and fu
tures for the current month.
A bill to correct the evils of the
New York cotton exchange, introduced
by Senator Willson I). Smith of South
Carolina, came up in the Semite a few
days ago. Senator Hoke Smith of
fered an amendment which was ac
cepted by the author of the bill under
which cotton tendered on a future
contract must have the actual market
value of Hpol cotton, and that settle
ment must be made on the market value
of the cotton itself Instead of an arbi
trary difference fixed by the ex
change.
Senator Smith Speaks.
When the bill "to regulate trading
in cotton and to provide for the
standardization of upland and gulf cot
ton separately," was under considera
tion In the senate on March 2(1, Sena
tor Hoke Smith explained the methods
of the New York cotton exchange very
clearly.
He said:
"Mr. President: The purpose of the
pending bill Is to compel cotton ex
changes, soiling future contracts to ho
regulate their contracts ns to make
the price list of Iheso exchanges show
the true value of lint cotloa.
“it is to prevent these cotton ex
changes from selling ft contract giving
such undue advantage to the sellar
that those who sell upon the exchange
may have It. in their power to depress
the prices at which cotton sails on
the exchange.
"The plan of the bill is to require
all exchanges engaging in the sale
of cotton for future delivery to so
shape their contracts as to remove the
present unfair means by which sellers
of cotton on these exchanges depress
the price of cotton and use the ex
change; for gambling purposes.
"The penalties provided by the bill
are to exclude from Ilia mails all the
business of those connected with tha
exchange where this business has any
thing to do with the sale of cotton un
less the contract provided In this bill
is used by the exchange, and also to
exclude from the mulls and telegraph
service all price lists made on cot
ton exchanges which do not use the
contract required In this bill.
Protest* Are Universal.
"This bill is especially directed at
the New York Cotton Exchange. For
years the cotton planters of the South,
the men who on the farms have raised
the lint cotton, have protested that
the market prices of cotton which
their labor brought into commerce
were trifled with and depressed l>y a
set of gamblers who manipulated the
price of cotton on the New York ex
change in a manner that affected the
price of lint cotton itself.
"Recently the manufacturers of cot
ton have Joined in the protest, and
have resolutions condemning the
methods of the New York cotton ex
change from cotton manufacturers of
New Knglaud and from cotton manu
facturers of tiie South. Other cotton
exchanges throughout the country have
also joined In protest against the
methods of the New York cotton ex-
change. The New York Commercial
day by day condemns them and points
out the fact that the contracts sold by
the New York cotton exchange cause
an unfair fluctuation in prices on that
exchange, misleading the public as to
the true value of lint cotton. I have
here also an editorial from the Newark
News, oue of the largest papers in
the manufacturing section of New Jar
se.v. where lint cotton ia largely spun
and woven, condemning the methods
of the New York cotton exchange.
"So 1 begin my case in support of
this bill with protests from all the
parties at interest against what is go
ing on upon the New York cotton ex
change.
"The New York cotton exchange han
dles over two hundred and fifty mil
lie's bales annually. Its records
profess to show the sales
daily of middling cottou and
the prices at which this grade of cot
ton sells in New York City. Their sales
profess to apply not only to imrnedi
ate months, but monthly In the future
to each month of the year. They pro
fess to record the market price of
■ middling cotton for immediate deliv
ery and for future delivery during
eleven months of the t ear
Depresses the Price.
"New York City is t’ e great m...
olis of our country, it is the center
of wealth and trade. The New York |
cotton exchange is by far the larger:
cotton exchange In the United State*.
Its sales far exceed those of any other
cotton exchange and all other cot
ton exchanges. The records of Its
! Tally prices are sent by the press as
sociations to each paper In the Unit
ed States which handles reports fro n a
press association. Its dally price lists
have a circulation throughout the Unit
ed States and throughout the v/orld
far In excess of r.ll other price lists
in the United States indicating the
market price of cotton.
"The public generally understands
that cotton Is really bought and sold
on the New York exchange, and tiiat
a purchaser under their published
prices can buy for immediate or fu
ture delivery middling cotton at the
prices indicated by their price lists.
It must, therefore, appear at once that
the price lists which go out from the
New York cotton exchange have an
almost controlling Influence on the
market price of cottbn.
Depresses the Price.
"It. can be accepted as undoubtedly
true that an unfair depression of the
price upon the New York Cotton Ex
i iiange depresses also the price of
lint cotton all over the south. Indeed,
it Is a fact that many large buyers of
lint cotton Instruct their local buyers
to purchase by the price lists of the
New York exchange, requiring them
to bid the New York exchange price
less about one-half a cent a pound.
"So, If I show that a contract Is
used on the New Y’ork Cotton Ex
change which enables sellers in that
exchange to unfairly depress the price
on that exchange of cotton for the
present and future delivery, show
that this exchange takes the hard
earnings of the farmer away from him
by preventing him from receiving a
just price for his lint cotton.
"If I show that their contract is one
which enables them to put up and
down their own prices almost as they
see lit, I show I hat the manipulation
of the market on this exchange is
damaging to the manufacturer and the
cotton merchant as well as the cot
ton grower.
Crop Worth Billion Dollars.
“Lint cotton is the second gieatest
agricultural product of flio United
States; corn comes first. The crop
last year, including the seed, was
worth $1,000,000,0(10. A largo part of
the crop is shipped abroad. Upon It
our country depends to a great ex
tent for Its International trade bal
ances. That portion of the crop which
is manufactured In the United States
furnishes occupation for a large num
ber of citizens, and is one of our chief
raw materials for manufacture. The
Importance, therefore, of tho staple,
both as it applies to our international
trade balances and as it applies to tha
producer and the manufacturer, is ap
parent.
"I ebargo that the New Y’ork Cotton
Exchange handles Its business under
a system which is unfair ami disrepu
table. The system permits the man
ipulation of prices for gambling pur
poses. and It is continuously used to
raise or lower the tho market prices
of lint cotton to meet the wishes of
the manipulators. This is unjußt to
the producer of cotton and to the
manufacturer and is an unfair stab at
the interests of our entire country.
"M v charge is that. Instead of being
a legitimate exchange furnishing the
opportunity lor those who have cotton
now or will have It in the future to
trade with those who need it now or
will need It in the future, the Now
York Cotton Exchange has devised a
scheme by which the seller can so
tender to a purchaser cotton that the
purchases can not take; or if he does
take it, he receives something he did
not buy, worth much less than the
legitimate market price of the cotton
which he was supposed to buy.
Shameless Robbery.
"My charge is that the New York
Cotton Exchange contract, with the
rules and regulations surrounding it,
creates a system of doing business
which amounts to little less than
gambling and enables the inside
crowd to play with the outside crowd,
the Inside crowd holding and seeing
all the cards, with every opportunity
to fleece their outside customers.
"1 wish to point out some features
of their contract and mode of business
—at least sufficient to justify my
charge.
“First: Number of grades. The
New York Cotton Exchange uses un
der its system a large number of
grades of cotton. While middling is
tile basic grade of all sales, they re
tain the right to the seller to deliver
any one of the grades named in their
list, aud their list covers 22 grades of
cotton besides middling. A purchaser
may buy 100 bales of middling cot
ton. He may have use for 100 bales
of middling cotton in bis own mill, or
ho may have a customer who desires
the cotton and will use it at hts mill.
When the purchaser, through the New
York Cotton Exchange, receives the
cotton, although he bought middling
‘on. he may have delivered to him
~ ttou so far below middling that it
is entirely useless for the purpose in
tended Not alone is this true, but he
i may be tendered a mixed lot of cot
ton, with only a few bales of each
grade scattered over the entire list of
23 grades, requiring him, if he takes
it. to hunt purchasers for each one of
the various grades, none of which
may be the grade he actually pur
chased.
‘Again, these various grades of cot
ton may be scattered all through the
warehouse, not classified, so that the
purchaser can go to the warehouse,
and if he obtains what is tendered to
him, he must have large quantities of
cotton handled and hunt through lot
after lot for his particular grades.
Buyer at Their Mercy.
"They also have a s. . mu of tender
lug the cotton which they call pro
BAM It 5 COUNTY JOURNAL HOhCk, GA.,
forma. I* c'.n
throctr'i an tr. ■ ii< e ,
specify the * xac • i
and*wbich leaves F / U
the cotton add ti . i to C
nate the exact i .
actually dellvoied. >
puts up his money at - • • ■ ’ to
find out what he to ret iv< .Vlien
he Anally receives a tof e • le*
he then must go through • p.ocesa
I have just dejeriiu I of •< .ih.ii.g it,
and if he finds that lit. . .t bundle
the Cotton outside of ti . • ■ York
Cotton Exchange < :> .v >t it. bud
character and undo. uk> u> r> eli it
through the exchange, although it
has been examined and cr"tile it by
the exchange to him ho mu. t have it
reclassified and ccrtilb and and pay for
this work. With all tnc ■•. hindrances
thrown around him be naturally
throws up his hands and says, “Keep
your cotton and settle with me as you
please.”
Arbitrary Difference.
"Second. Arbltary differ.-:.-cs: The
mode of delivery before di ribed Is
bad enough, but far wor-i i. tin- sys
tem pursued by the New Y’ork Cotton
Exchange of fixing an arbitrary differ
ence of value between the mlddl ng
cotton which the purchaser undertook
to buy and the 22 other grad- -, either
one or many of which may be deliver
ed to the purchaser. |ty this 1 mean
that a purchaser may buy on the New
York Cotton Exehange middling cot
ton the seller tan deliver to him any
one of the 13 grades less valuable
than middling or any one of It nude-,
of cotton more valuable than midil n.-:'
If one of these 13 grad l > I' -.. v.llual
than middling, or if a mi ed lot is ten
dered, the seller dees not pay the pur
chaser the actual difference in market
value of the lowi grades which lie
!■ aiders and ml
required by the rn :1 : : : ■ i <
Exchange to .- imp - an :
trary difference win a 1 a
Itself has fixed and whim, it ha . •■ i
in the habit of living oi.iy or- a a yen'
Buyer Loses $-a Eale.
"flood, ordinary cofon i a .. ie
below middling. The dii --re- in Its
value and the value "f n Xu--; cotton
varies every year, i r 1 on the char
acter of tiie crop, mm of i: •
good ordinary produn and, and the de
mand for It. Tin cat net - ' ill
value might be $' a hit t
the exchange fixed a -t at .
a bale the purcha - r m ni-d-l hi;; cut
ton would be forced to tak* - I or
dinary and receive on y Si a -t ■ bo
nus for taking u cottu.- -crili a
bale less that the :: ■ 1 he
purchased. The purc'm -
therefore, be receiving in - .n i l
money $5 less a bale than the n
- cotton which h - i•> i
worth. It will be re 'in U t
the inside sellers, rca am a
could settle for middling < ■' o am
the system <d Uie exchange
bale less than its mark,
bear on the m t-i et the ..
dling cotton down I c
Warehouse Full of
'T will mention ye am
that furnishes opi rtm-
Now Y’ork Cotton v : >
manipulate and bear : t :
freeing the seller from i.•. to
liver a genuine qua t,of , a \ :
middling out ton is net . y 1
same cotton. All the lo> P-.idc; I
cotton below middling n.v mu o!
actly the same value. Cotton Is grad
ed iai 'oly according to color and
Cleanliness. Unoi : c -in ' ml
lathe Now Y, !. Fxvhangi a large lot ,
if cotton can bo pm chased, and then
ti c best of til. vu !o.is grad. can be
picked out no. . ic- -
carers, while the pu c~; are retained
and kept in New Y to " * nd red
to purchasers. Tlu-re Is a difference
in the length of the staph- of cotton
< t the sumo grade, and tuerc .s a dll
loience in the diameter of the cotton
of the same grade. A systematic ef
fort to select cotton of short staple
and poor eharaetor, though .ailing
within the grades named, muk. > ii i
possible for those dealing upon the
New York Cotton Exchange to retain
a lot of junk, commonly cal ed dog
tail cotton, and, supplied with this in
ferior cotton of the grades to be ten
dered, furnish not only a low grade
with an arbitrary dub . . . •, a
this and the grade sol i, but a.so a
poor class of the lower grade far be
low the average run of the grade.
This means lias also been r, s r*, : to
on the New Y’ork i'u'ion • vchau:,'
and low-character, i.-v . > am
lias accumulated from - to year to
be tendered to pm a a ad
ditional means . the
character of the the
seller when tin for
his cotton, and in th wa> -- ,:,avq
the price of cotton >’d the arm
or.
Disreputable ;
"As low as has t . : . . and ird
of character of coi a cd : y tin'
New York K\> hap- I ■ . tii Pa
pers last Saturday that a ids c dum
house, the luggc-s- 1 > • a
United States, with a • i to
be heavily shot t on tue New . U.v
change, lias been et.deavotta.: to force
the exchange to ace y - ■ ■ rtify a
large amount ot ad il very low
character cotton ba .etc ore teeit i
by the exchange. 1 do r t l>e i-'ve the
officers of the cotton exchange vdl
dare to yield to this demand. 1; they
do the law should be used to s::
both the cotton horse and the ex
change. The difficulty. In over, is
that one small, ordinary and a or can
not carry the burden. It re., -re . au
organization of manat e:. ,•> cad t.
ton men to meet the sit’ a
"1 have certainly p a: > ?-
ficlent number of lines of . a ,r
--sued on the New W , K
show that the system is r, i f no.
disreputable. Its unfa;;- r s 1 de
livery gives sellers upon Ihwexchange
Eyes Tested Free
I will leave CcmiLerce next Thursday April 16th. for a stay of
four weeks.
All w 7 ho wish my services will call before that time, Monday or
Tuesday will be the best time.
DR. J. P. PARK’S
The Careful Optician In Office With Dr. Sharp.
COMMERCE, GEORGIA
th* oi>p -rtunity to force down the
prices lild for cotton on the exchange
almost at their plrusure, for the sell
ers well know that buyers can not af
ford to take under their system what
they offer. The Immense quantity o
i h*dr sale 1 , with theii facility for ad
vertising the selling prices all over
the country, tend to force actual
prices down and thereby injure the
men who raise lint eotton The price-*
an- made flet tlously to rise and fall,
th reliy injuring all who handle cot
on, the manufacturer as weil as the
cotton crower.
Time to Suppress It.
"The time has ionte when this In*
tit.Ulon a now conducted should he
■uppres.e.i, unless it can he forced to
et hono.-t methods. It is no more
. nt it led io the ute of the mails and
the telgiaph linos under its bttsincs
as now conducted tiian was the lot
u v, the exclusion of the business o'
which from the mails was sustained
by the Supreme Court of the United
States.
"it is the organized enemy of cotton
growers and cotton manufacturers,
manipulating prices of the raw mate
rials which the the one manufacture*
and which the other grows
■ A few years ago. suffering fro!
the effect of the evil conduct of tlii
or that organised enemy, certain i
ton buyers and cotton inauufacturi
united together and determined -
buy and require delivered to them u
the cotton held by the New York hi
change. They made an ngr< > ui*nt
that they would buy and d.striiiu:
among themselves the cotton, agree
lug further that neither of tho- ; in th>
compact would resell the c Hton si
that it could be used in the g. mblin
marts of the New York Exchangi
Tlie organization was made in self
defense against a wicked enemy*
which by unfair means was attacking
and breaking down their legitimate
business. This organization sbuuld
have been commended by honest men
who believe in a square deal, and yet
under the direction of the department
of justice these men engaged i; a pa
triotic work were charged with being
guilty of an illegal conspiracy and
were indicted for alleged violations of
the Sherman anti-trust act.
Must Reform or Quit,
"Today if a body of men, manufac
turers and cotton merchants would
join together and make a similar
agreemeeat and take up all the junk
called cotton on the New York Ex
change. agreeing not to resell any of
it through any exchange and thereby
arrest the work of the men who have
been manipulating cotton for the past
ow months to the injury o*' the pub
iio, they should be commended for
their service more than any organiza
tion of private citizens who would in
vade a den of gamblers.
"I would be glad to see the ex
changes continue in legitimate busi
ness. 1 would be glad to see them
continue with their unfair system
eliminated. But, if this can t be done,
then better destroy them than to al
low a continuation of their unfair
methods. If they can be made to de
liver cotton covered by government
standardization and deliver it prompt
ly, with no strings tied to the mode of
delivery to deprive the purchaser of
his just rights, then with their gamb
ling methods brought to an end they
would be of real value.
•-We will try them now with an ef
fort to regulate, but they should un
derstand that forbearance has about
ceased. There is a way to stop them
entirely, and unless they help purify
their own house and bring it to a con
dition of decent and legitimate busi
ness, the next movement against them
will be to terminate them."
The bill was passed.
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| I3tratg ffitrstc Sfiltr*!a
I Soda |1 Soda ft Soda
[ 100 lb*. to mjl Acre J
Georgia's Oat Crop
What Top-Dresslnfi with "Quick-
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25 Msdisoo Vv< * _ —-a
Ifo Bi'SUtr 3 N. 3
CURIOUS BITS
OF HISTORY
THE PARENTS OF NAPOLEON
By A. W. MACY.
The book* that have been
wri.'en about Napoleon would
form a goodsized library; the
knowledge we have about hit
parent* may be condenaed Into a
paragraph. They were both of
Itaban descent. The father, Car
lo Mariel Bonaparte, wav born at
Ajaslo, Corsica, In 1746. He waa or
a noble family, but poor. He la
described as fire looking, tall,
manly, and above the average in
Intellect. He was ambitious, as
will be se. nfrom the fact that he
pursued a university course at
Pisa after hl marriage. Napo
eon*s mo*her’a maiden name
wit LetiWa Hamollno. She was
beautiful. but had little educa
tion. She was proud and ambi
tious, bi t wa an excellent moth
er, a* Napoleon tell* us. Carlo
wa* 18 and Letitia 15 at the time
of their marriage. Thirteen chi‘-
dren were born to them, of
whom eight grew to mrturity.
The father died In 1785, when
Napoleon wa* only 16. The wid
er utiived her husband half a
century, dying in 1835, In her
eight y-sixth year. B'lth parent*
undoubtedly had much to do
with forming the ambitious char
acter cf Napoleon. The father is
said (0 nave in*plro. his chil
dren with the belief that they
vere of rare stock, nd might
expect to rise In the world.
.'<*orriit: 1912. '*> l.wrpti B tJ .wire 1
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