92 THE UNITED STATES DEPARTMENT OF AGRICULTURE 



To secure a better observance of the requirements of the 

 law, and to enable the Secretary to determine equitable com- 

 mercial values in those cases where cotton other than the 

 specified grade is tendered, a system of periodical investi- 

 gations of, and daily reports from, both future and spot 

 'markets is maintained." The act requires that only the quo- 

 tations from " bona fide " or approved spot markets shall be 

 used in the determination of commercial values. Such 

 markets must be designated by the Secretary of Agriculture 

 after inspection. 



No adequate criticism of the operation or administration 

 of the cotton futures act is available. According to those 

 officials who are engaged in the enforcement of the statute, 

 it has accomplished the chief economic objects anticipated 

 by its framers. Future quotations now represent spot values 

 more accurately ; sharp and sudden fluctuations have become 

 less common, and prices have been increasingly stabilized. 

 Generally, these changes help the producer to obtain more 

 equitable prices. They also benefit the cotton dealer or 

 manufacturer by giving him a truer index of the advance 

 value of raw material. Furthermore, they secure to all con- 

 cerned in the financing of the cotton crop a safer hedge. It 

 has also operated to remove some of the suspicion which 

 formerly attached to exchanges that transactions were not 

 always fairly conducted.^' 



That conditions are improving is shown by a marked de- 

 crease in the number of disputes submitted in the fiscal year 

 191 7 as compared with previous years. 



The act is interesting as a historic step in the movement 

 for governmental supervision and cooperation in the trans- 

 action of business.^* 



22 ProRfam of Work, Fiscal Year, 1917, pp. 461-462. 



23 Report of Secretary of Agriculture, 191 5, p. 45- 



2* For an analysis of the Cotton Futures Law and of the circum- 

 stances leading to its enactment, see Journal of Political Economy, 

 vol. xxiii, p. 465; and American Economic Review, March, iQiSi 

 vol. V, p. I. 



