tions have been manifested in the building of hundreds of warehouses and in the endeavor to market the crop slowly throughout the year, instead of in three or four months. It is difficult to obtain statistics of the number of warehouses built, but I am informed that in Texas alone over 300 have been erected, capable of holding 600,000 bales. At Memphis, there has been constructed a splendid system of modern fireproof buildings with a capacity of 200,000 bales, with plans for doubling in the near future.

If the warehouse system is still further developed in the future, it seems to me entirely practicable for a New England Exchange to trade in warrants or certificates of actual cotton held in Southern warehouses, either for immediate or future delivery. It is admitted that there would be difficulties to overcome, such as unreliability of classification, but there is no insurmountable obstacle in the way of a final accomplishment of this plan.

A committee of the New York Cotton Exchange has advocated the certification of cotton in Southern warehouses, and also the trading in actual cotton, which would result therefrom. The following extracts from the committee's last report are interesting in this connection:

"By the natural enlargement and development of this certificate system our Exchange will perform for the whole trade its true function, by bringing the buyer and seller together to trade upon a fair basis. with the very least amount of risk or delay or uncertainty or loss."

"There is not an objection to this plan that cannot be met and overcome, either absolutely, or by greater advantages in other ways."

"But now extend our system, certificate in warehouses in the South even running lines of grade and also of staple cotton, display these samples in New York and give the spinner just what he is asking for, with the extra advantages of a guarantee of the grade."

"With all these advantages spinners will seek to join our Exchange (just as brokers and dealers do now) and as the export business grows they would meet upon our floor with the cotton sellers and the export buyers. Will not drawing spinners into our Exchange insure us a large amount of new business?"

Why not secure for a New England city the working out of this system? The logical location should be in New England. where two thirds of the spindles of the country are located, and 2,500,000 bales of cotton are annually consumed. It is in New England that most of the finer classes of goods are made, and especially as regards staple cotton, a central market would be of great advantage. The proposed system of certificating cotton would be equivalent in many respects to a spot market in New England, but it might be found profitable and advantageous to go further and carry stocks of spot cotton at this center as wel as in Southern warehouses. It should be remembered that frequently the stock of cotton in Liverpool is over 1,000,000 bales and always amounts to several hundred thousand bales. There is no reason why a system that English merchants and spinners find mutually profitable should not also be desirable for our New England manufacturers, for as regards time of transportation of cotton, Boston and Providence are as distant as Liverpool from Southern shipping points. Many mills are borrowing money at high rates of interest to carry for months cotton that they do not need. They could effect a distinct economy by purchasing spot cotton as their requirements developed. This phase of the problem might be further elaborated both as regards the economical financing of certificated cotton, and the saving in freights by sea transportation to one central New England point.

Before closing, I wish briefly to refer to the subject of “trading in futures" as carried on by the large exchanges. This question has recently been much discussed; Congress has ordered an investigation of Cotton Exchanges and the report from the Bureau of Corporations is eagerly awaited; bills are before Congress which if they become law, would practically annihilate the Exchanges. In connection with this subject, it seems to me that many sophisms have been promulgated. It is said that future trading is a necessity to the industry. Why should it be so, if the wool crop of the world, amounting in value to $500,000,000 annually, as well as the silk and linen crops, are

marketed successfully without trading in futures? This system. does not finance nor move the crop, and it certainly affords great opportunity for speculation, which is injurious to legitimate industry. The speculator claims to "foresee" coming conditions. Unfortunately this is not his chief business. It is to create temporary artificial conditions by selling quantities of cotton that he does not own, or buying cotton that he does not intend to accept delivery of. In the long run it must, of course, be admitted that supply and demand regulate price, but in the intermediate artificial fluctuations, the speculator makes his money, and the grower and manufacturer are apt to suffer disaster.

The advantages of the future market are to be found in the insurance which it affords to those who are moving the crop; the opportunity to buy and sell immediately for any month in the future, and the hedge which is provided to cover distant sales of goods or stocks of cotton. I am not in favor of abolishing a system which has many advantages, and which has become so firmly ingrafted to the industry. In fact, I believe that both grower and spinner may have to avail themselves more frequently of the hedge which futures afford, in order to reduce the speculative features of their business.

Everything possible should, however, be done to root out speculation and gambling and to make the Exchanges subservient to the interests of growers and spinners. The discussion of recent years has, I believe, made it clear, that the differences in tenderable grades should be adjusted continually by market value and should not be fixed for a long period; that each 100 bales tendered should be practically uniform in grade and staple and thus suitable for spinners' use; also that the extension of Southern warehouses, and the tendering on contracts of certificated cotton will tend to steady prices and prevent corners. Another suggestion that seems to me eminently practicable and likely to make "futures" more useful to spinners, is to trade in three grades instead of one (say low middling, middling and good middling) with a penalty imposed in addition to the

market difference, for the tendering on contract of another grade from the one purchased.

As American Manufacturers we are interested in the prosperity of the Southern States and desire to see them supplying the great bulk of the world's cotton. The closer union that has recently been accomplished between growers and spinners, as witnessed at the International Conference of Cotton Growers and Manufacturers held at Atlanta, Ga., October 7 to 9, 1907, will eventually result in getting rid of the useless parasites that fatten on the industry, and in securing the transference of cotton from grower to spinner with economy and justice to both. To this end, the establishment of a New England Cotton Exchange would be an important contribution. The future of cotton manufacturing in New England, although for the moment discouraging, is full of promise. There must be enormous expansion and development in the years to come. Manufacturers, merchants and bankers should co-operate to control the trading in the raw material, which is incidental thereto, and place it on a sound economic basis.

The PRESIDENT. Has any one any questions to ask about this paper? It is certainly one which will deserve careful consideration and ought to be of such interest as to bring out some remarks. The Chair awaits comments. I have no doubt Mr. MACCOLL will be very glad to answer any questions that are presented.

The next subject is Improvements in the Cotton Fibre from Storage of Seed Cotton.

The SECRETARY.

Mr. President, for preserving its place on the record I will merely state that at the conference at Atlanta, on the question of the packing and baling of cotton several of

the leading cotton planters advocated the storage of seed cotton from thirty to sixty days, explaining that during that period the oil from the cotton would enter into the fibre, making it slightly of a creamy tint and more flexible, so that it would spin better, easier and with less waste. The advantage of that creamy. line of cotton of course is well known to manufacturers. Further than that, it was claimed that this growth of the nutriment of the oil in the cotton seed would lengthen out the shorter fibres and average up the fibre. It was not claimed that it would increase the length of the longer fibres but that it would increase the length of the shorter fibres. There was not an American manufacturer or a foreign manufacturer there and the foreign representation included Great Britain, the Continent of Europe and representatives from South America - who knew anything about that subject; it was entirely novel to them. As soon as the conference was over I wrote to our good friend for he is a friend of the cotton manufacturing interests, the Hon. JAMES WILSON, Secretary of Agriculture, stating that if his department had information upon that important subject it would be of great advantage to the cotton growing and the cotton manufacturing interests to publish it, a crude estimate reaching two or three million dollars on the cotton crop alone, and furthermore I requested that if he did not have any such information would he start a line of investigation which was suggested in some detail. The response was prompt and cordial. The work has gone ahead and I expected to have a very full report at the present time. However, I have this letter of March 30.

March 30, 1908.

Mr. C. J. H. WOODBURY, Secretary and Treasurer,

The National Association of Cotton Manufacturers,

Boston, Mass.

Dear Sir:-I have your letter of the 21st instant, in relation to the investigation being conducted by this department of the growth of the