Atlanta Georgian. (Atlanta, Ga.) 1912-1939, September 04, 1912, EXTRA 2, Page 4, Image 4

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4 COTTON FARMERS ARE VICTIMS OF TARERULES Corporation Commissioner Re ports Injustice From False Weight Practices. Washington, sept. 3— a raise standard of weights which inject un certainty into practically every Ameri can cotton sale in the Important mar kets of Europe, resulting In serious abuses, indefensible practices and even fraud on the part of cotton merchants in this country, has been created by the rules of foreign cotton exported from the United States, according to Luther Conant, Jr., commissioner of corpora tions, in a report to President Taft. The reoort is based upon an exten sive investigation of cotton tare —the allowance for bagging and ties inclos ing a bale of cotton in order tp ascer tain the net weight—which was under taken on complaint that American cot ton producers were subjected to aerl ous loss because of excessive deduc tions for tare under the regulations of leading European markets. The pro ducer does not ordinarily suffer under these rulea, according to the commit eloner, because of the active competi tion among merchants in the purchase of cotton from the farmer for export. The existence of competition and its remedial effect, however, he points out, cannot always be relied upon, and it is impossible to escape the conclusion that the produce may be Injured, and sometimes is. Complicates Price Figures. The tare rules, the report declares, complicate price regulations with an unnecessary* element of chance, and In. volve economic waste because of the use of excessive bagging. If this waste does not injure the producer, or merchant or spinner, it must Impose an unnecessary burden upon the con sumer of cottonwoods, says the report. Commissioner (.Tn ant declares that Im mediate action should be taken to remedy the evils, and offers sugges tions for temporary and ultimate per manent relief. The American producer sells his cot ton gross weight, and, as a rule, ac cording to the report, believes that*he makes a big profit on tare by receiv ing the same price for bagging that he obtains for cotton. This Is untrue, the report says, as the evidence demon strates that the buyer of cotton takes the tara into consideration in fixing the price he offers. , Cotton for export, on the other hand. Is sold net weight. It Is In this c<n nection that complication and unwi tslnty are Injected Into cotton sobs The American exporter, b\ the tetm of hi., invoiet eoiitrmt with the foi'iun buver must compute the net weight or his cotton t»y deducing fi per , ent from the gross weight The aveiagi bale of cotton, weighing 500 pounds gross, contains about 478 pounds of cotton and 22 pounds of tare as It comes from the producer to the ex porter. A deduction of f> per cent, un der 1 lie foreign tare rules, from a gross weight of 500 pounds, however, would leave only 470 pounds net or 8 pounds less than the actual weight of the net cotton the bale, in addition to tout discrepancy, the report points out, the eituatlon Is further complicated by the fact that when the cotton reaches its destination, the foreign buyer, under the contract with the American ex porter, htrs the right to demand an actual test for tare. In this test the rul<« fix a maximum allowance for tare of 500 pounds. This is a discrep ancy of three ami one-half pounds as compared with file 30-pound invoice deduction, and the foreign buyer call? upon the exporter to make good th it (amount Exporter Faces Problem. Th- American exporter, under these circumstances, according to the report, faces a serious problem to avoid con ducting business at a loss Some cot ton merchants, Mr. Conant says, argue that these facts are thoroughly under stood by the trade, and are adjusted In the price which the exporter asks for his cotton. The commissioner does not entirely agree with tills view, and Bays that the practical result of the rules has been that the exporter adds unnecessary tare to his cotton. ‘■The exporter." he says, "naturally adds tare up to the amount allowed by the rules .roughly 26 1-2 pounds). He does this by ‘patching’—that is, placing strip-bagging on the bale. A small part of such patching Is usually necessary to cover sample holes. However since the exporter, in making out his invoice, must deduct six per cent, he frequently goes further and adds tare up to nt least six per cent of the total weight of the bales; sometimes he adds even more. “Obvlouely. If the exporter makes a complete adjustment in the price, and also adjusts by adding tare, he makes a profit of such added tare. If, how ever, complete adjustment Is not made 1n the price, this addition of tare be comes simply a means of protection against loss, although in the trade it is usually spoken of as a ‘profit on patching.’ "Granting that the price of cotton is In no way affected by the six per cent rule. It Is nevertheless highly ob jectionable. It results in changing the gross weight of the bale and thus in troduces an avoidable element of chance, both as to the actual weight of cotton to be paid for and as to price.” Half Over-Tared. As a result of this six per cent rule, the commissioner estimates that at jcjhpns of cotton are over-fared and that proportion of the re- malnder Is under-taxed. It is this use of unnecessary tare, says the report, i that injects uncertainty and possible i fraud into the cotton business. “This uncertainty," adds the report, "strikes at the basic factor of every transaction, namely, the amount of the commodity actually sold. It in effect establishes a false standard of weights with the invariably unfortunate con sequences of such a condition. It thus gives an advantage to a skilled class of specialists who best understand the complicated details of the business with a corresponding disadvantage to the less expert. It is not sufficient to say’ that the competition ‘among these skilled classes often forces them to turn over the benefit of this false measure to the producer. It is not seriously contended that this is always so. and there Is thus ever present the open door to fraud. There is always the invitation to cotton merchants to adopt improper practices, and there is thus enticed Into the trade a class i of men who bring discredit upon hon est merchant®. This is not only the retlcally so, but It Is actually so. Buy ers of cotton, both in this country and abroad, are constantly finding them selves Involved in transactions where shippers have taken advantage of these opportunities to defraud.” Standardization Remedy. The ideal remedy for all these evils, Mr. Conant concludes, Is the standard ization of tare to be put on a bale of cotton by making it a definite or read ily ascertainable amount, so that the net weight may be determined with out controversy or test. The present careless and irregular methods of cov ering cotton, If the evils are allowed to go uncorrected, he declares, seem like ly to invite legislation. Pending the adoption of a thorough remedy, the commissioner believes substantial benefits will accrue by modifying the six per cent contract so as to provide for a deduction of five per cent or some other percentage more ac curately representing the amount of covering actually necessary to protect the cotton. The requirements of the contract, he says, should certainly be Identical with the allowance established by the rules under an actual test. There would be a great saving, the report says, if the cotton could be com pressed at the gin. Under the present practice, the staple Is pressed at the gin and later compressed to greater densi ty at numerous establishments scat tered over the cotton belt. Compress ing at the gin, he says, would encoun ter opposition from the owners of com presses because It would destroy their business. Furthermore, he adds. It would be Impractical at this time be cause It would require a capital outlay of at least $100,000,000 to equip gins with compresses. 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With hfm i it does not matter how compli cated or how dim ll ' sight might be, if the eyes respond to the light he can uncover any and all hidden defects, and correct same with glasses In a manner that gives pleasure, comfort and re sults herebefore unknown. He wishes all to know that his prices are no higher than elsewhere, and that there are no charges for examining when glasses are bought. HINES OPTICAL COMPANY 191 Peachtree St. felween Mon'pomcry and Alcazar Theaters I Men and Women I CURE YOU TO STAY CURED, — 1 r - all chronn . nervous, ptivate. blood and ' | -'" ln diseases. 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