administration of important regulatory laws 8/ 



The United States Cotton Futures Act 



By act of May 23, 1908/^ the Secretary of Agriculture 

 was authorized to estabhsh standards for the various grades 

 of cotton which are handled in the cotton markets. This 

 was the first of a series of such acts establishing grades or 

 standards for the more important agricultural products.^^ 

 At first their use was permissive or optional ; recently the 

 use of most of them has been made obligatory in those trans- 

 actions which involve interstate commerce. 



It was believed by those persons who were instrumental 

 in securing the establishment of cotton standards that even 

 their voluntary use would prove helpful in eradicating some 

 of the evil and harmful practices in the marketing of cotton, 

 particularly those relating to future exchanges which had 

 proved most detrimental to cotton producers. This expec- 

 tation was not very fully realized. Accordingly, on August 

 18, 1914, Congress passed an act, " to tax the privilege of 

 dealing on exchanges, boards of trade, and similar places in 

 contracts of sale of cotton for future delivery, and for other 

 purposes."^* This measure, with some amendments, was 

 re-enacted August 11, 1916.^" 



While the compulsory use of the official cotton standards 

 extends only to contracts on future exchanges made under 

 the provisions of the act, they have now been accepted and 

 are used voluntarily in practically all of the important 

 " spot " cotton markets of the counti*y. Through the county 

 agents, demonstrations as to the value of these standards 

 have been made among the farmers themselves. 



Ostensibly, the present cotton futures act is a revenue or 

 taxation measure. Its primary purpose, however, is to reg- 

 ulate the business of cotton exchanges with the object of 

 eliminating some of the evil features of future dealing in 

 cotton, and to stabilize cotton marketing generally. 



"35 Stat. L. 251. 



ii'The most important of these is tlie U. S. Grain Standards Act 

 to which reference has already been made. 

 i"38 Stat. L. 693. 

 20 39 Stat. L. 446. 



