COTTON PRICES AND MARKETS 25 
buyer. Spot contracts are not traded in across the ring where 
futures are bought and sold. All such transactions are private, and 
there is no ring or designated place for trading in spot cotton. 
NUMBER AND LOCATION 
There are eight places in the world where contracts for the future 
delivery of cotton are dealt in. New York, Liverpool, and New 
Orleans are of major importance. New York and New Orleans con- 
tracts are based on American Upland cotton. In addition to trading 
in American cotton, the Liverpool Cotton Association has a separate 
ring and contract for trading in Egyptian cotton. The other futures 
markets are at Alexandria, Egypt; Bombay, India; Bremen, Ger- 
many ; Chicago, 111. ; and Havre, France. The contract of the Havre 
exchange is based on American cotton, and the business transacted is 
similar to that of New York and New Orleans, but in smaller volume. 
The exchange in Alexandria has a contract similar to the Liverpool 
Egyptian contract, which provides for settlement on differences in 
value of staple length as well as on values of differences in grade. 
The Bombay market deals in Indian cotton and has a separate con- 
tract covering each important .growth in the country. 
There is an important spot cotton market in each of these cities 
with the exception of New York and Chicago. The merchants 
in New York handle a great deal of spot cotton, but it is chiefly 
cotton bought in the South and routed by way of New York to some 
New England mill center or to a foreign market. 
ORGANIZATION OF FUTURES EXCHANGES ™ 
The general principles of organization and operation of the dif- 
ferent exchanges are essentially the same. The New Orleans Cotton 
Exchange is selected for description here. It is a corporation 
domiciled in the city of New Orleans and chartered under the laws 
of Louisiana. The purposes of the organization and the general 
principles limiting its field and its methods of operation and gov- 
ernment are set forth in a constitution and by-laws. These must 
be consistent with the laws of Louisiana and of the United States 
cotton futures act, and must be adopted by the members. It has 
a capital stock of $100,000 divided into 500 shares listed at $200 
each, though the market value of memberships is many times this 
amount. A member must hold at least one share, though ownership 
of a share does not confer privileges of membership. 17 
The actual conduct of business is under the general direction and 
supervision of a board of directors. All powers of the association are 
vested in and are exercised by a president, a vice president, a treas- 
urer, and 12 members, who constitute a board of directors elected an- 
nually by all the members. The board adopts the rules and regula- 
tions which are designed to carry out the purposes of the association, 
in keeping with the constitution and by-laws, and performs such 
other acts as are authorized by the charter. 
16 For a more detailed description of the different futures exchanges, see HubbarDj 
W. H. cotton and cotton marketixg. New York, 1923. 
17 In New York there are 450 memberships, each worth (1924) about $30,000. The 
initiation fee is $1,000. The board of managers determines the amounts of the annual 
dues, fees, and fines. 
6103°— 26 4 
