454 ANNUAL REPORTS OF DEPARTMENT OF AGRICULTURE. 



IMurph. The enforcement of the act is carried out under the following 

 projects: 



INVESTIGATIONS OF FUTURE AND SPOT MARKETS. 



These investigations are directed by Mr. George R. Argo. Securing 

 accurate quotations for different grades of cotton, especially in the 

 case of low grades, has been increasingly difficult during the past 

 season owing to the wide divergence in prices in different sections 

 of the cotton belt. Low-grade cotton has been quoted at the widest 

 discount off Middling, the basis grade, ever known to the cotton 

 trade. Quotations for Good Ordinary have been published b}^ spot 

 exchanges as low as 1,200 points off Middling, and doubtless cotton 

 of this grade has sold at greater discounts at interior points. The 

 possibility of the delivery of future contracts of cotton of this char- 

 acter at differences that were undul}^ narrow resulted in an abnormal 

 disparity between spots and futures, but the readjustment was rapid 

 as soon as quotations for differences were widened to the approximate 

 selling value of low-grade cottons. Such widening also resulted in 

 creating a broader market for low^-grade cotton. Under an amend- 

 ment to the cotton futures act, by the wheat price guaranty act of 

 March 4, 1919, authority has been granted the Secretary of Agri- 

 culture to require reports of purchases and sales of spot cotton in 

 order to secure accurate quotations for the various grades. This in- 

 formation will be especially valuable to the producer when it relates 

 to cotton below Low^ Middling on account of the untenderability on 

 future exchange contracts of the low^ grades and the comparative lack 

 of authentic information available to the producer as to their value. 

 It is intended to publish all such information that will be of value 

 to the public. 



Representatives of the designated spot markets held a meeting in 

 Memphis in April, 1919, to devise a uniform system of quotations 

 by the spot exchanges. A tentative plan was adopted and submitted 

 to the exchanges for ratification, effective August 1. It appears that 

 substantially all the exchanges have agreed to adopt the plan. 



DETERMINATION OF DISPUTES AND CLASSIFICATION OF COTTON FOR DELIVERY ON 



FUTLTJE CONTRACTS. 



The number of disputes increased materially during the last fiscal 

 year owing to the fact that a large quantity of low-grade cotton Avas 

 delivered on future contracts. P'or 1919 a total of 493 disputes were 

 received and passed upon as against 146 in 1918. The total number 

 of bales of cotton involved Avas 29,308 as against 6,895 in 1918. The 

 amount of money collected for determining the disputes Avas $9,066.68 

 as against $2,202.30 in 1918. This fund Avas coA^ered into the Treasury 

 of the United States in accordance with the provisions of the United 

 States cotton futures act. 



In accordance with an amendment to the United States cotton 

 futures act by the wheat price guaranty act of March 4, 1919, all 

 cotton to be delivered on future contracts is noAV classified by the De- 

 partment of Agriculture, and no further disputes Avill be heard, except 

 possibly on some old-style contracts outstanding that may be settled 

 by delivery of cotton in fulfillment thereof. Very few old-style con- 

 tracts, however, are outstanding, and the likelihood of further dis- 

 putes is remote. 



