Among the order of business was the adoption of a uniform standard of classification for the United States. The committee appointed to consider this matter consisted of Mr. John Chaffee, as chairman, and other members. Mr. Chaffee was from the New Orleans Cotton Exchange; the other members were from Charleston, Galveston, Memphis, Mobile, New York, and Savannah. This committee reported unanimously to the body that it was thought necessary-a very necessary thing-to have a uniform standard, and at that time, through their recommendation, a Mr. John T. Doswell, of New Orleans, La., was elected chairman of a committee of experts to adopt a standard classification, each of the experts to be composed of representatives from the cotton exchanges throughout the country present at that meeting in Augusta. The following composed this committee: Mr. J. T. Doswell, of New Orleans, chairman; A. K. Childs, Athens, Ga.; J. H. Cohen, St. Louis, Mo.; Thomas Fenner, New York, N. Y.; S. M. Gates, Memphis, Tenn.; J. E. Gilbert, Nashville, Tenn; J. E. Ginn, Eufaula, Ala.; J. C. Graham, Selma, Ala.; D. E.Huger, Mobile, Ala.; S. M. Inman, Átlanta, Ga.; R. M. Powle, Baltimore, Md.; W. D. Reynolds, Norfolk, Va.; C. E. Richards, Galveston, Tex.; William C. Sibley, Augusta, Ga.; B. R. Smith, Boston, Mass.; J. E. Stenhouse, Charlotte, N. C.; L. L. Taylor, Cincinnati, Ohio; and William H. Woods, Savannah, Ga. This committee met in New York, N. Y., and on the 1st of September, 1874, the first American standard classification was adopted. It was adopted effective in October, 1874, by all exchanges which participated in that convention in Augusta, Ga. These standards were used by all of the exchanges for the seasons of 1874 and 1875 and by many others up to within the last 10 or 15 years, when each exchange went back to their methods of classification. The New York Cotton Exchange advocated the making of standards under Mr. Burleson's recommendation, and gave the Bureau of Plant Industry of the Department of Agriculture the use of one of its best men in Washington to make the standards after the committee of experts had determined what they should be. He stayed in Washington from February, 1909, at intervals until April 11, 1910-all told, about 127 days-assisting the Bureau of Plant Industry in making these standards. As a member of this committee of experts having to make these standards, immediately the work was finished I applied for two sets of those standards, one for the New York Cotton Exchange and the other for my firm. That was in February, 1909. The New York Cotton Exchange did not receive a copy of those standards until August, 1910. At the time of the making of these standards in February, 1909, I drew the attention. of the other members of the committee to the fact that we should have three sets of standards made, viz, of upland cotton or Atlantic States cotton and the other Orleans-Gulf and Texas cotton, but unfortunately the Bureau of Plant Industry was unable to get any cotton from the upland or Atlantic States to make those standards, and as it seemed urgent the committee worked with the cotton on hand and made a standard out of the Memphis, New Orleans, and Texas cotton. When the standards were sent to the New York Cotton Exchange they were submitted to what we call the "warehouse" and delivery committee, the committee of merchants having in charge the inspection of cotton for delivery on contract. As soon as the boxes were opened it was perfectly plain that the standards had been made up of growths other than upland cotton, which is the basis of all the trading on contracts for the future delivery of cotton. They immediately got into communication with Dr. Cobb, of the Bureau of Plant Industry, with the result that we had an interview with him in New York, and at his request a set of standards was made up of upland cotton to match in all particulars the grades shown by those standards made in Washington with the upland characteristics of color and staple. These standards are in the possession of the Department of Agriculture, Bureau of Plant Industry, in Washington to-day. We feel and know, as actual handlers of cotton all over the cotton belt, that it is impossible for any market in the Atlantic States trading in cotton to adopt the standards as they are to-day, not that there is any objection to the grades as made, but gentlemen, it did not go far enough. There should have been a set of standards made up of upland cotton. Those who are familier with the cotton business know that each growth that I have mentioned has a distinctive appearance, which is ascertainable to the average man, even though he be not an expert in cotton. Another thing which the New York Cotton Exchange has had under advisement with the Department of Agriculture is that in the making of these standards the basis of the grades made was that used commonly over the South in shipping cotton for export, the exportation of cotton, roughly speaking, being about two-thirds of the cotton grown in this country, and custom, before grades were established in this country, grew up that there was a basis grade formulated by Liverpool, which was the largest consumer of American cotton for many years, grades which they gave to cotton taking middling as a basis, and the committee having in hand the making of these standards took the middling as shipped from the South to correspond commercially with the grade of fully middling that the foreigner accepted from the American exporters. These grades as shipped would not match the standards in force on the Liverpool or Bremen or Havre cotton exchanges, but the European merchants and spinners accept them as a commercial fulfillment of the contract of sale. In making these standards the present good ordinary cotton, which the New York Cotton Exchange recognizes and which was made by that committee of experts in 1874, was eliminated, due to the fact that in order to make all grades uniform (there being a distinctive difference between each grade), the present good ordinary was not provided for in the legislation that was enacted in Congress with the result that a very large proportion of the American crop to-day is without a standard based on the Government standard. That happens this season in particular. Some of my southern friends on this committee will no doubt know that the grades of cotton picked in the South for the past few months have been very low, due to the bad weather, and they can not get values for these grades. The farmer had no control whatever of this yield; nature did it by the bad weather. We feel that a standard should be made to provide for the present good ordinary cotton. Mr. LEVER. What is the lowest standard now, the Government standard? Mr. NEVILLE. Good ordinary in name. Mr. NEVILLE. One more grade below good ordinary to take the place of the present good ordinary American standard classification. I would call that strict ordinary. I will show you the exact samples of this grade later. Then again the standards as adopted call for grades running from strict good middling to good ordinary, and I have told you how under the system that the committee adopted (which, in the opinion of the committee, would cause the least confusion throughout the cotton belt) the grades of middling fair and fair cotton were not provided for. There are times, gentlemen, when the nonexistence of a standard for the present good ordinary and for middling fair and fair would not work any hardship on the producer; but there are times when, not having a standard for those grades, a great hardship is worked on the producer by not having the means of ascertaining the market value for his product. You take the crop of to-day, a large proportion of which is of very low grade-the grade that I ask to be standardized the present good ordinary has a distinct spinning value, usable in any kind of fabric that goes into the ordinary use of the people who buy ginghams or calicoes. If it is used in dry goods it can be used in the highest class of ginghams. If it is used for fancy shirtings or for ladiees' underwear, it can not be used; but wherever it is used, it can be used for middling cotton or any other grade of cotton. Now, with the grades of middling fair and fair there are times that the product of that crop is very large, particularly in Congressman Lever's district, and not so much in Mr. Heflin's district, but in the settlements of Texas around San Antonio, all through that section of Texas represented by a line drawn from Houston, Tex., to San Antonio south, and a little north of that line it is grown some seasons in very large quantities, and you are practically forcing everything above strict good middling to be classed as strict good middling. Yes, sir; you are forcing the present good ordinary standard to be classed below that standard, with the prices fixed on it according to the exigencies of the situation. If there is a fair demand for the grades the farmer will get a fair price. If there is no demand he will get a price so low that it will not pay a man to buy it unless he buys it as junk. I have here samples of good ordinary and yarns made from this cotton that I received from textile schools in the United States. That grade is ostracized under the present Government standard. Mr. HEFLIN. The trouble with this thing is it is not in the fiber. Mr. NEVILLE. That is just the coloring trash at the end near the fiber. There is the yarn that is made from that identical cotton. Mr. HAWLEY. The grade below produces a better yarn? Mr. NEVILLE. No, sir. Mr. HAWLEY. Are those two grades that you spoke of exhibited here? Mr. NEVILLE. I am showing only the good ordinary, the yarn produced from cotton that is ostracized under the present Government standard. Mr. HAWLEY. And the other yarn is from cotton that has the lowest rating? Mr. NEVILLE. Yes, sir. Mr. LEVER. Your idea is, then, that they have given that a bad name? Mr. NEVILLE. That cotton has a distinct value. All the wastage in the way of trash is easily figured out, and the finished yarn I have shown you. That yarn has been tested in the two textile schools of this country-the Lowell Textile School and the Clemson College Textile School. Mr. Earl, of the Clemson College Textile School, is an employee of your department to-day, and he can give you more figures on it than I can. Mr. WICKLIFFE. The percentage of waste? Mr. NEVILLE. The waste of that finished yarn is 21 per cent. Mr. LEVER. In your judgment, on account of this debasement of this grade of cotton, what is the lowest price per pound? Mr. NEVILLE. I would say, conservatively speaking, $5 a bale below its worth in spinning. Mr. LEVER. The establishment of this new standard would add $5 per bale? Mr. NEVILLE. Yes, sir. Mr. LEVER. What percentage of this kind of cotton will be produced this year? Mr. NEVILLE. I would say, Mr. Lever, it is a difficult, hard thing to do. I can only answer that by giving a résumé from our Texas office or Greenville (S. C.) office. Our percentages of present receipts are about 10 per cent of that grade and the grades below itstrict ordinary. Mr. LEVER. That runs, on the average, 5 per cent of the total crop? Mr. NEVILLE. In some seasons it is more than that. Mr. LEVER. Is it on account of the fact that you do not have these two grades in the Government standards that the New York Cotton Exchange has failed to accept that standard? Mr. NEVILLE. That is one reason, and another reason-it is not made up of upland cotton. Mr. LEVER. These grades here are not made up from upland cotton? Mr. NEVILLE. No, sir. It is made from Memphis, Tenn., and New Orleans, La., and Houston, Tex. There were not 50 pounds of upland before the committee of experts in February, 1909, that we could use for the making of standards. Mr. LEVER. Why? Mr. NEVILLE. I do not know. You will have to ask some one else. Fortunately, thinking there would be standards made up of Texas and Orleans-Gulf, and being that I was largely in business in Texas, I took the precaution to have sent me by express to Washington enough cotton of Texas growths to make two sets of standards for each of the grades called for in the resolution. Mr. Crump, of Memphis, sent his up from Memphis, and Mr. Airey, of New Orleans, who was on the committee, sent his up from New Orleans. If we depended upon the department's man that they had sent out we would not have gotten any; he was not able to get the material. Mr. LEVER. I confess great surprise at these statements and that these samples were not made of upland cotton. Mr. NEVILLE. They could not be had. Mr. LEVER. What proportion of upland cotton is grown? 80304-13-2 Mr. NEVILLE. It looks like Georgia will make this year about 2,750,000 bales; North Carolina, 1,000,000 bales; South Carolina, 1,600,000 bales. Mr. LEVER. Approximately, then, you will say about one-third of the crop is not standardized? Mr. NEVILLE. Yes, sir; in those States; but there is some upland cotton produced in other States. The CHAIRMAN. Have you taken this matter up with Dr. Galloway? Mr. NEVILLE. In reading Dr. Galloway's appearance before your committee in December, I notice the meager reply or the meager information that Dr. Galloway supplied you gentlemen with, but as soon as I found it out I made up my mind that something should be clarified, and I am here to clarify it. The CHAIRMAN. Dr. Galloway's statements were made in reply to my questions? Mr. NEVILLE. Yes, sir; I understand; and Dr. Galloway had all this information. I gave it to him in November and the cotton exchange gave it to Dr. Cobb in letters. The CHAIRMAN. I would like to say, in that connection, that neither Mr. Wickliffe nor myself attempted to draw Dr. Galloway out on the assumption that these standards here involved the entire cotton crop. Mr. NEVILLE. No, sir; they do not. The Atlantic States production is not standardized. Mr. HAWLEY. Did you approve of the standards as far as they go, and you are now contending for other grades? Mr. NEVILLE. Yes, sir. Mr. HAWLEY. Everything else provided, you will be satisfied with the standard? Mr. NEVILLE. Yes, sir; but we want a standard classification that represents cotton that is quoted and traded in on all cotton exchanges and in all cotton markets. While I am president of the New York Cotton Exchange, I have one vote only, but it is my duty as president of the exchange to study the welfare of the exchange and present to the members for adoption such matters that I regard as desirable for the entire cotton trade. I regard this as a very necessary thing in the cotton business, and we are Mr. HAWLEY. And so regarded by other exchanges? Mr. NEVILLE. As far as I know; yes, sir; but we can not adopt them as they are now. I want to state that at a meeting in New York in October, 1911, between representatives from the American Manufacturers' Association (embracing southern mills) and representatives from the National Cotton Manufacturers' Association (embracing the northern mills) met committees from the New Orleans and New York Cotton Exchanges to consider certain recommendations that the manufacturers wanted to make to the cotton exchanges, and after seven hours' conference, participated in very generally by the way, a copy of that discussion is in Dr. Cobb's hands to bear out what I am going to tell you now-and during that discussion I was asked why the New York Cotton Exchange had not adopted those standards, and I told the gentleman that we could not adopt them, and told them briefly what I have told you here to-day, |