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Mr. MANDELBAUM. No; you clothe business with such difficulties as to require affidavits on both sides that would make it appear that the business that is done on the New York Cotton Exchange would be of a semicriminal character. Mr. BEALL. I am only asking you if the New York Cotton Exchange could exist if only these classes were included. Mr. MANDELBAUM. I am inclined to think it would. Mr. BEALL. I am only eliminating the man who speculates upon cotton as a pure matter of speculation. Mr. MANDELBAUM. I think it could. Mr. BEALL. Would the business of the exchange be seriously affected 7 Mr. MANDELBAUM. I think so. Mr. BEAL1. Then, as a matter of fact, in your judgment, a very large part of the business upon the New York Cotton Exchange is conducted by men who trade on that exchange simply through a spirit of pure speculation? Mr. MANDELBAUM. No, sir. That leads back again to the whole question of future trading, Mr. Beall. Mr. BEALL. You spoke of the difference between wool and cotton. Mr. MANDELBAUM. Yes. Mr. BEALL. There are differences, of course, but is it not true that in both the wool trade and the cotton trade there is at least this point of similarity—that in both there must be a supply of lambs in order to make trading brisk? Mr. MANDELBAUM. In wool? Mr. BEALL. In wool and cotton both. Mr. MANDELBAUM. In wool there must be a supply of lambs; that is the origin of the business. [Laughter.] Mr. BEALL. Is not the lamb in the cotton business of about as much importance as the lamb in the wool business? Mr. MANDELBAUM. No, sir. The CHAIRMAN. I will ask you just one question, if everybody else has concluded. I believe it is your contention, and that of your colleagues, that there are no transactions on the New York Cotton Exchange in which the intention of bona fide delivery is not present, although the expectation may be absent? Mr. MANDELBAUM. It is. The CHAIRMAN. Then, a bill which seeks only to interdict messages relating to contracts in which future delivery is not intended would not in any way concern the New York Exchange? Mr. MANDELBAUM. I do not think so, for the very reason that if an affidavit could be demanded, or would be demanded, it would put a stigma upon the whole business and destroy its influence amongst the commercial world, not only in this country, but amongst the whole commercial world. Mr. McLAUGHLIN. The affidavit would be difficult to get. Mr. MANDELBAUM. Affidavits can be made very easy in this country, and the fact is that there are so many affidavits required that it seems to me sometimes that they have really lost their effect, and there is no question in my mind that this Ši. to a great extent, would encourage perjury, evasion, and circumvention of the law.

Mr. MOLAUGHLIN. There would be no need of evasion or circumvention, because they are all dealing honestly. It would seem to be a difficulty imposed on the dealer to make the affidavit.

Mr. MANDELBAUM. I do not know what might be in your mind when you send an order from Omaha or some other place. I have to take it in good faith that you do.

Mr. MCLAUGHLIN. It would be a mere inconvenience to the dealers there?

Mr. MANDELBAUM. In New York ?

Mr. McLAUGHLIN. It would be a mere inconvenience to those doing business any day through the stock exchange, if an affidavit were required in each case ?

Mr. MANDELBAUM. The stock exchange is not included in that bill. Mr. McLAUGHLIN. The cotton exchange, I mean.

Mr. MANDELBAUM. It would not only be an inconvenience, but, as I stated to the chairman, it would give the whole business a somewhat dishonorable character.

The CHAIRMAN. It would throw a stigma on it, in your judgment? Mr. MANDELBAUM. Throw a stigma on it. It would be used principally by exchanges like the Liverpool exchange.

The CHAIRMAN. Does any member of the committee, or any of the gentlemen, desire to ask Mr. Mandelbaum or any other member of the delegation from New York a question ? Mr. ELLERBE. I want to ask Mr. Hubbard one or two questions. The CHAIRMAN. Please make the questions as short as possible. Mr. ELLERBE. I listened to his remarks about traveling abroad and meeting a member of the New York Cotton Exchange everywhere. I want him to tell me how many members of the cotton exchange live outside of the United States. Mr. HUBBARD. I believe about 69 or 70. Mr. ELLERBE. Out of a total membership of what? Mr. HUBBARD. Four hundred and twenty-nine.

Mr. MANDELBAUM. I beg your pardon. Mr. Chairman, if you will permit me, Mr. Hubbard is only referring to the southern members.

Mr. HUBBARD. No; I am speaking of those who live in Europe.

Mr. MANDELBAUM. I wish to hand you a directory of the New York Cotton Exchange.

The CHAIRMAN. We would be glad to have it. Mr. ELLERBE. I know it is impossible to say how many contracts or trades were made in any one year, but there are certain figures that always stand out prominently in everything. Can you tell me the maximum; have you any idea?

Mr. HUBBARD. No; I have no idea.
Mr. ELLERBE. You do not know about what it would be?

Mr. HUBBARD. No more than I could tell, as I attempted to illustrate, when I went into business how many times a bale of cotton had been sold before it reached Europe. I know we used to sell the bales over and over again, and finally we would sometimes get the same cotton back again. My employers would find the market had gone up sufficiently and would buy back the cotton we had previously sold.

Mr. ELLERBE. I notice in the daily reports, for instance, sales 500,000 bales; sales 1,000,000 bales.

would Lchanges bales

Mr. HUBBARD. Those are estimates.
Mr. ELLERBE. There is no record kept of that?

Mr. HUBBARD. I have been there when a man said 20,000 bales were traded or 8,000 bales were traded in a day. It is just simply a guess at it. An employer will say, “How much has been traded in a day?" I say, “I do not know." He will say, “Do you think it has been a million ?” I answer, “Maybe.”

Mr. ELLERBE. Then there is no way of ascertaining?
Mr. HUBBARD. No.

Mr. HEFLIN. Have you ever had any cotton brought from the Liverpool exchange back to the New York exchange?

Mr. HUBBARD. There has been cotton brought back. I never brought any back myself.

Mr. LEVER. In your best judgment, Mr. Hubbard, how many bales of cotton handled would you call an active day on the exchange ?

Mr. HUBBARD. I should think 500,000 bales would be an active day.

Mr. LEVER. Would you call 350,000 a normal day's work?

Mr. HUBBARD. No, I do not think so; I think that estimate is too high.

Mr. LEVER. A million bales would be abnormal ?
Mr. HUBBARD. That is extraordinary.

Mr. LEVER. Five hundred thousand would be about the normal day?

Mr. HUBBARD. That would be an active day.

Mr. ELLERBE. Now, if I may just ask one more question, in order to be perfectly fair with you—you see what we are getting at, of course?

Mr. HUBBARD. Yes.

Mr. ELLERBE. I think we ought to have some expression of opinion on this point; if that 350,000 be a normal day's transaction, how much of that is done by the members of the New York Cotton Exchange between themselves, where no commissions are paid, and approximately how much is done by outsiders, where they pay $15 a contract?

Mr. HUBBARD. I could not say. It is very difficult to tell. I might have a stock of cotton in store in New York, as I had the other day, and have now, and I had sold March against it, and there came a demand for January, which carried January to a premium over March so that it might be more profitable for me to make delivery of the cotton in January than March; I bought 6,500 bales of those 8,000 and sold January—there would be 13,000 baleswithout paying a commission. So it is rather difficult for me to reach that conclusion.

Mr. BROOKS. Have you any figures of the annual expense of maintaining the machinery of the exchange?

Mr. HUBBARD. It is all in a report. My impression is that the amount expended for running the exchange and furnishing the information of the exchange, our largest item is $18,000 or $20,000. I think the expenses are about $45,000.

Mr. MANDELBAUM. They are covered by a levying of dues of $75 a year upon the membership. It could not possibly be that amount. It is generally a little less.

Mr. HUBBARD. It is in the report. We would be perfectly willing to furnish you the exact figures.

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Mr. LEVER. What is the highest and lowest price paid for a seat on the exchange, in your recollection? Mr. HUBBARD. At the formation I do not know what they charged—a sum of money necessary to equip a room and establish the exchange. I paid $300 for my membership in the exchange in 1879. Then we wanted to erect a building and we limited our membership and gave the world a chance to come in and buy memberships, which they did, and the price ran up to about $5,625, at which I think Mr. Mandelbaum bo. the highest seat that had been sold at that time. Afterwards the price went down to I think it was $800. Mr. MANDELBAUM. Five hundred dollars. Mr. HUBBARD. And since that time it has been advancing. One time it sold as high as $23,000. Two years ago I bought one for my son at $8,000, and now I think they are worth about $15,000 or $16,000. Mr. SIMs. Is there not as much actual cotton bought, sold, shipped, and received in the month of November, as there is in the month of December, as a general rule 7 Mr. HUBBARD. There is a little more that comes into the market in November than in December. Mr. SIMs. Is there not as much in February, as a rule, as in March? Mr. HUBBARD. There is more. Mr. SIMs. Is there not as much in April as in May? Mr. HUBBARD. There is more, or should be. Mr. SIMs. Is there not as much in June, as a rule, as there is in July 2 #. HUBBARD. It is about an even . Mr. SIMs. Mr. Hubbard, suppose you sell a thousand bales of cotton for December's delivery now? Mr. HUBBARD. Yes, sir. Mr. SIMs. In what month would you buy as a hedge against that cotton? Mr. HUBBARD. Next December? Mr. SIMs. Yes. Mr. HUBBARD. I could not buy December now; it is very difficult to buy December. Mr. SIMs. It is quoted, though; you would buy December? Mr. HUBBARD. o: Mr. SIMs. Now, then, when will you sell your hedge in actual operation? I have no trick question. Mr. HUBBARD. Just as soon as I buy the cotton. Mr. SIMs. And you buy the cotton along in the fall as it is delivered 3 Mr. HUBBARD. Yes, sir; whenever I can buy it to the best advan

tage.

§. SIMs. And when you get the cotton in October or November so you can comply with the spot contract, you would sell your December hedge?

Mr. HUBBARD. Yes.

Mr. SIMs. Now, as an inevitable result, when the farmer is selling more cotton, than the market demands and you are selling out your hedge, does it not tend to aid in the depression of the price?

r. HUBBARD. I do not see it, sir

Mr. SIMs. Selling both at the same time Mr. HUBBARD. I do not see it so at all, because there are buyers for all deliveries all the time. Mr. SIMs. Who buys your hedge when you sell it out to protect yourself on your December delivery : Mr. HUBBARD. Another merchant who is making another hedge. Mr. SIMs. Hedging in December? Mr. HUBBARD. Yes, sir. Mr. SIMs. Can you gentlemen, all operating in the same month, heo #. each other as to that month Ž r. HUBBARD. It depends upon our orders. I can hedge and Mr. Neville can hedge me. He may have a contract from the spinner to buy, and I may be selling for a man. It happened last spring when I bought that low-grade cotton. r. SIMs. In as much as there is much actual business done in November, and more than there is in December, why is there not as much future selling or buying in November as there is in December or October 2 Mr. HUBBARD. I do not know; it is a psychological question. Mr. SIMs. And you have been president of the cotton exchange three times? Mr. HUBBARD. Twice. Mr. SIMs. And one of its charter members? Mr. HUBBARD. No; I was then a boy. Mr. SIMs. And you can not answer that question? Mr. HUBBARD. No, sir. Mr. SIMs. I do not mean it as an insinuation; I mean you do not know? Mr. HUBBARD. No. Mr. NEvil LE. As an exporter of cotton and a large seller ahead, I can answer that question in this way Mr. SIMs. You begged me to quit asking you any questions. The CHAIRMAN. Let him answer. Mr. NEVILLE. My answer to that question is this: That spinners very rarely ask you for November shipments. They usually, buy September-October shipments, and this cotton enables their mills to run until January or February. . The next time they want the cotton shipped to them is December shipments. I can not recall a season where I have sold specifically to a spinner for a stated November shipment. I have sold them October–November shipments where I have the option of shipping either in October or November. Mr. SIMs. Then you force me to ask you another question. Mr. NEvillE. All right. Mr. SIMs. Are not the exports of cotton in November relatively as great as they are in December? Mr. NEVILLE. Yes, sir; but that is cotton that has been sold for September and October shipment from some interior point. r. SIMs. If you can get along without futures to hedge for four months, why can you not get along all twelve : Mr. NEville. Try it. Mr. SIMs. I am not going to try it.

§. at 12.20 o'clock p. m., the committee took a recess until 2 o'clock p. m.)

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