,libraries47 about ,,sugar ,,buying for ,jobbers ,how you can lessen business risks by trading in ,refined ,sugar ,futures by ,b4 ,w4 ,,dyer ,a ,,booklet ,,for ,,jobbers ,,who ,,sell ,,sugar ,lamborn ,company ,,sugar ,,headquarters #acb ,,front ,,street ,,new ,,york ,copyright1 #aiba ,,lamborn ,,company ,about ,sugar ,buying ,jobbers who have had considerable experience in exchange operations will find in this booklet a simplified and non-technical description of activities with which they may be in general familiar4 ,we believe1 however1 that the inauguration of trading in refined sugar futures on the ,new ,york ,coffee and ,sugar ,exchange1 ,inc41 throws open a new realm of opportunity4 ,we have attempted to outline briefly the chief advantages to be gained by a jobber's use of this new market1 assuming that those who have in the past dealt in raw sugar as a protection for their refined sugar needs will welcome suggestions as to the benefits to be derived from trading directly in refined sugar4 ,time1 the ,croupier of ,business ,like a croupier at a vast roulette table1 ,time presides over the realm of business4 ,time is the tap-root of most business uncertainties4 ,no one can tell what will happen a year1 a month1 a day1 a minute from now--the future may bring floods and wars1 pestilence and drouth2 or it may bring great crops and fair weather1 happiness and prosperity4 ,as business has become more and more complicated1 the time element has become larger and larger4 ,the time element as we know it does not exist in simple barter--a man weaves a piece of cloth and exchanges it for a bushel of corn3 time is of no account in the transaction4 ,a small jobber located in the same territory as refiners buys a small amount of sugar today and distributes it to his trade the next--time is negligible4 ,a large jobber1 buying perhaps for several branch houses1 or located at points which necessitate a delay of two or three weeks in transit1 may find it necessary even on a declining market to purchase a considerable amount of sugar1 and1 as a result1 weeks may go by before his sugar arrives and is sold--time is vitally important4 ,time is an element in costs and prices1 because over any extended period of time many things may happen to influence costs and prices4 ,all business planning must deal with ,time4 ,to the unenlightened business man1 ,time is a bugaboo--a gambler whose cards are stacked and against whom there is no defense4 ,such a man conducts his business from hand to mouth1 in constant fear4 ,he is a fatalist1 taking his profits and losses as if they were gifts or blows of ,fortune4 ,the enlightened man works with ,time as an impartial1 exacting1 inevitable power for his own good or ill4 ,he shapes his actions and enlists the services of ,time to prevent catastrophe on the one hand1 and to enforce prosperity and happiness on the other4 ,storms may come1 but so far as his mind may control it1 he is the master of his fate4 ,cost and ,selling ,prices ,that the element of ,,time is important in the jobber's business no one will deny4 ,he does not base his selling price on cost1 but rather on the market price4 ,regardless of his cost1 he must sell to meet competition4 ,it is equally obvious that the larger his business1 or the greater his distance from the source of supplies1 the more important part ,,time plays in both his cost and selling prices4 ,all jobbers1 large or small1 are obliged to assume greater risks 7even proportionately7 and exercise greater care1 than1 for instance1 retailers buying in small quantities4 ,a jobber's business may enlarge by a perfectly natural process of expansion1 but his purchasing risks increase in greater ratio than his business expands4 ,similarly1 under abnormal conditions1 jobbers located at points requiring several weeks in transit prior to delivery1 must assume greater risks than those located at the source of supply4 ,in the event of serious delays in deliveries or in shipments1 even buyers located at shipping points are confronted with this problem1 and the difficulties of those located at a distance are increased immeasurably4 ,these difficulties tend to accentuate the importance of ,,time in modern business4 ,as business grows1 instead of decreasing--risks increase4 ,any machinery which might operate to eliminate or reduce this uncertainty or speculative element in a jobber's business1 would1 we believe1 be welcomed4 ,exchanges provide just such machinery4 ,other commodities1 such as raw sugar1 wheat1 cotton1 pork and coffee have had this machinery for years and it was provided for refined sugar on ,may #b1 #aiba1 when trading in refined sugar futures was inaugurated on the floor of the ,new ,york ,coffee and ,sugar ,exchange1 ,inc4 ,where ,buyers and ,sellers of ,sugar ,meet ,the ,sugar ,exchange is a market place1 where buyers and sellers of sugar or their representatives meet to trade4 ,the ,exchange provides a concentration point1 where1 under any market conditions1 sugar may be bought or sold at a price4 ,what that price is1 is determined by how much sugar is for sale and how many people want it4 ,if the supply is large and buyers are few1 the price will be low4 ,if sugar is scarce and buyers are numerous1 the price will be high4 ,or1 to put it in another way1 when there are more sellers than buyers1 the market declines2 when more buyers than sellers1 it advances4 ,if the supply and the number of buyers are normally well balanced1 the price will be determined largely by the cost of production and transportation4 ,if events or circumstances operate to increase or curtail either the sugar supply or the number of buyers1 and such events or circumstances follow one after the other alternately1 the price will fluctuate4 ,these are the results of the operation of well-known economic laws4 ,in the case of all commodities which cannot be bought or sold at a common market place 7or exchange71 price fluctuations are usually wide and frequent1 because no large group ever has common knowledge of supply1 demand and other factors that govern prices--purchases and sales are made direct between individuals1 and knowledge of the amount asked or paid is restricted to a limited few4 ,through the common market place provided by an exchange1 on the other hand1 market conditions and prices become common knowledge almost instantly over the entire country4 ,this tends toward stabilization--a fact which1 alone1 helps to eliminate risks1 and enables merchants to buy at lower prices than if forced to deal direct with one another4 ,sellers do not have to take such long chances and can thus afford to sell on a smaller margin of profit4 ,competition is stimulated and freed from many of its complications and uncertainties to the advantage of the seller1 the buyer and the public4 ,it is now admitted that1 had exchange trading in refined sugar existed in #aibj1 a general use of the exchange by all branches of the trade might have prevented1 to a considerable extent1 the abnormal advance in sugar prices of that period1 with the hardship and misfortune that attended4 ,the fact that an exchange always provides a buyer and a seller1 at a price1 tends toward keeping business fluid4 ,jobbers are able to protect their future requirements4 ,producers are sure of a market for their crops4 ,crop financing is made easier because bankers are more willing to loan on crops sold in advance--an operation made possible by an exchange4 ,exchanges operate to take the gamble out of business4 ,they help to put and maintain business on a sound basis4 ,that some people who have no real interest in the commodity use the exchange speculatively does not alter this fact4 ,in providing machinery by which speculative risks incident to a jobber's business may be shifted from the jobber to those who make a business of assuming such risks1 exchanges help to stabilize his business and to remove a large part of the destructive uncertainty with which he would otherwise have to contend4 ,exchanges are the creations of modern economic development1 designed and operated for the benefit of the commerce1 industry and people of the civilized world4 ,therefore we welcome trading in refined sugar futures and the opportunity to offer you the advantages that may be derived from a conservative1 intelligent use of its services4 ,the ,exchange provides certain quality standards and other regulations to safeguard your interests4 ,but your real assurance of protection lies in the character and reliability of your broker4 ,if your broker is not strong financially you do not have back of your contract the responsibility that you might otherwise have4 ,if you had a favorable contract with a broker who became insolvent1 you would have no means of forcing the fulfillment of the contract1 and no way of securing the profit which was due you4 ,the thing to do1 of course1 is to choose a broker who is so strong financially that you incur no danger in this respect whatsoever4 ,use the ,exchange when the ,market is ,favorably out of line ,in considering the illustrative examples in this booklet1 it should be borne in mind that the measure of protection afforded is relative and not absolute4 ,the theory of exchange operations is that the exchange market will move relatively the same as the market for the actual commodity4 ,this cannot be strictly true1 although the exchange market must of necessity follow very closely the actual market1 because all the sugar must1 in the final analysis1 come from the actual market4 ,if thrown out of parity with the actual market1 the exchange market is bound to come back eventually4 ,in the exchange market anyone can buy and anyone can sell4 ,the market is subject to many outside influences1 and the fluctuations reflect and accentuate the varying shades of market opinions of many individuals4 ,but in the market for the actual commodity1 the quotations are made by comparatively few men1 which means that there will be less fluctuation4 ,therefore1 it is obvious that although the exchange market should be on a parity with the actual market1 the unequal fluctuations of the two markets will be constantly throwing them out of parity or out of line4 ,there are times when the market will be so out of line that the buying of futures should result profitably4 ,at other times1 with conditions reversed1 selling of futures seems obviously advisable4 ,we do not claim that jobbers can protect sugar purchases with absolute and exact precision4 ,on the basis of long exchange experience1 we do believe1 however1 that by a discreet use of the ,exchange1 and by using the market when quotations are favorably out of line1 jobbers can do so to their decided advantage4 ,selling of ,futures--,hedging ,as the word itself indicates1 a hedge on the ,exchange is a protection4 ,you hedge by buying or owning actual sugar1 and selling short in the same amount4 ,you sell sugar futures although you do not own any4 ,you actually contract to deliver an amount of sugar during a specified future month at a specified price4 ,eventually1 you must either buy and deliver actual sugar to carry out this contract1 or you must buy another contract for futures to cancel your short sale4 ,this is known as a covering operation1 and the cancelling of one by the other takes place automatically through the channels of the ,exchange4 ,from the jobber's point of view1 the operation of hedging has three outstanding purposes4 ,he may hedge3 #a4 ,to eliminate the probability of speculative profit or loss1 due to market fluctuations4 #b4 ,to protect a profit on a favorable purchase of actual sugar4 #c4 ,to establish and limit a loss on an unfavorable purchase of actual sugar4 ,,hedging to protect a normal jobbing profit by eliminating the probability of a speculative loss or gain4 ,this operation is particularly useful to jobbers with whom conditions are such that they desire to be assured that their cost will be at about the market price at the time they dispose of their sugar1 regardless of whether the market be higher or lower4 ,although there are times when any jobber1 no matter where located1 will find this a useful transaction1 it is obvious that many buyers will not wish to use the market in this way unless they feel it will decline4 ,but it is particularly of advantage to a jobber located in markets necessitating a delay of from one day to several weeks in transit4 ,for instance1 on a certain day in ,april1 two jobbers bought their usual quantity of sugar4 ,one was located in ,syracuse1 the other in ,new ,york4 ,two days following the purchase1 the market broke half a cent per pound4 ,in view of the fact that his sugars were still in transit when the market declined1 the ,syracuse buyer was obliged to sustain this entire loss1 in order to meet competition4 ,on the other hand1 because he received and distributed the sugar before the market broke1 the ,new ,york jobber was able not only to avoid a loss1 but make his regular profit4 ,,chart #a ---------------------------------------- ------------------------------------ ,,hedging to protect a normal jobbing profit by eliminating the probability of a speculative loss or gain ---------------------------------------- --------------------------------- ,initial ,transactions ,subsequent ,transactions ,result ---------------------------------------- ------------------------------ ,liquidating ,condition ,price ,result ,figure ,in each the hedge of market you of your case 7covering7 when you would hedge sugar the cover pay cost cost same your hedge in this this cover way way -ing ---------------------------------------- ------------------------------ ,you buy ,when you ,profit ,actual cost actual sugar sell your ,it has declined less profit at #f4jj sugar 7or to #d4jj #d4jj #b4jj #f-bd when it is delivered7 you buy ,you get the same your amount of sugar futures at at the the market market price1 price whether at the higher or time lower4 when you sell it 7or when ,at the same ,actual costyour time you ,it has advanced ,loss plus loss delivery hedge by to #h4jj #h4jj #b4jj #fbh is made47 selling the same amount ,no of futures ,it stands at profit1,actual at #f4jj #f4jj #f4jj no losscost ---------------------------------------- ------------------------------ ,naturally the greater the amount of sugar any one concern may have in transit the greater the need for protection4 ,we call this kind of transaction particularly to the attention of buyers having branch houses who find themselves obliged to make relatively large purchases to supply their trade in the face of a market in which they have no confidence4 ,these disadvantages at which out-of-town buyers are sometimes placed might be overcome by using the ,exchange4 ,on the other hand1 when refiners are badly behind on deliveries1 even buyers located at the source of supply will find themselves facing a similar problem the solution of which may be found in a use of the ,exchange4 ,it is therefore evident that the selling of futures may be a transaction the sole purpose of which is to eliminate speculation from a jobber's business4 ,regardless of how careful a buyer may be1 there is an element of speculation in each purchase of actual sugar4 ,if the price goes up1 there is a speculative gain--the sugar is worth more4 ,but if the price goes down1 the buyer sustains a speculative loss4 ,the measure of protection afforded by the ,exchange will appeal to those jobbers who wish to reduce the speculative element in their business4 ,in the example immediately following1 as in all others1 we have not taken into consideration the difference between the ,exchange quotations and the ,seaboard ,refiners' quotations1 which is explained on page #ch4 ,this would simply inject an unnecessary complication1 and would be of no particular advantage for purposes of illustration4 ,suppose you should buy through your broker from a refiner1 for prompt shipment1 an amount of actual sugar at #f4jj1 which you plan to sell within a short time after its receipt4 ,instead of worrying about subsequent sugar price fluctuations1 you simultaneously hedge this purchase by selling futures in the same amount on the ,exchange4 ,the price at which you buy actual sugar and the price at which you sell futures should be relatively the same1 since ,exchange prices generally reflect refiners' prices4 ,you should be able to figure the cost of your sugar at about the market price at the time it is received or sold4 7,see ,chart #a47 ,if the price of sugar should go down to #d4jj at about the time when you sell it1 your actual sugar1 for which you contracted to pay #f4jj1 would be worth only #d4jj2 but you would then buy to cover your futures sale1 making #b4jj on this transaction1 which1 subtracted from the price you paid 7#f4jj71 brings the cost down to the market price of #d4jj4 ,in other words1 you have accomplished your purpose of being able to figure your sugar cost at the market price at the time when you received it 7or at the time you sell it74 ,that is1 although every pound of actual sugar was sold at a loss1 this loss was balanced by the profit from your hedge4 ,if1 on the other hand1 the market should advance to #h4jj after your original purchase and hedge at #f4jj1 the value of your actual sugar would be increased by #b4jj4 ,you would then buy futures at #h4jj to cover your short sale at #f4jj1 netting a loss thereby of #b4jj4 ,this loss would be added to your original cost of #f4jj1 making your actual sugar cost #h4jj1 which is the market price at the time4 ,had you omitted the hedge1 your sugar would have cost you only #f4jj1 but1 in this example we are assuming that you would sell only when you were willing to figure your sugar cost at the market price4 ,this you have accomplished by foregoing the speculative profit you might have made in favor of your normal jobbing profit4 ,if the market should remain relatively stable you would buy to cover your hedge at approximately the same price as you sold for1 your gain or loss being practically nothing4 ,in other words1 you would obtain sugar at the market price1 which is the purpose in this kind of a hedge4 ,,hedging to protect a gain on a favorable purchase of actual sugar4 ,all sugar buyers have had the experience of buying actual sugar1 only to see it advance or decline before they have disposed of it4 ,how to protect the gain1 or minimize the loss1 is described in the two hedging positions which we now discuss4 ,suppose you have bought sugar1 have not hedged against it1 and have seen it advance4 ,finally you have said1 ,i think sugar is about as high as it is going4 ,i am going to sell against that to protect that profit4 ,on the other hand1 the reverse might be the case4 ,you might find the market going down1 and say1 ,the market is going lower4 ,i want to hedge against that1 and limit my loss to a definite amount4 ,,chart #b ---------------------------------------- ------------------------------------ ,,hedging to protect a gain on a favorable purchase of actual sugar ---------------------------------------- --------------------------------- ,initial ,transactions ,subsequent ,transactions ,result ---------------------------------------- ------------------------------ ,hedge ,condition ,price you ,result of ,figure ,in of market pay for hedge and actual each when you futures covering sugar case cover to cover operation cost the your hedge hedge this way same ---------------------------------------- ------------------------------- ,you buy actual ,price paid sugar at #f4jj1 for actual but before you ,it has sugar less,your have received declined hedging sugar it 7or before to ,a profit profit cost you sell it7 #f4jj #f4jj of #b4jj #f-bd4jj is the price #b4jj advances to under #h4jj ,price paidthe for actualmarket ,you now have ,you sell,it has sugar plus your sugar at futures advanced hedging #b4jj under theat to ,a loss loss market #h4jj #aj4jj #aj4jj of #b4jj #fbh4jj ,you feel that ,it stands ,no profit1 the market may at #h4jj #h4jj no loss #f4jj recede and eliminate this gain1 so-- ---------------------------------------- ------------------------------ ,in both of these cases1 the operation is relative4 ,if a man has a profit1 let us say #b a pound1 and he hedges1 he maintains his profit of #b a pound as compared with the market at the time of delivery1 or at the time when he expects to sell this sugar1 regardless of whether the market is higher or lower4 ,in the same way1 conversely1 if he has a loss on his sugar of #b a pound1 by hedging he can limit that loss to #b a pound1 even though the market goes still lower4 ,in other words1 his sugar cost at the time of delivery1 or at the time when he expects to sell the sugar1 will be about #b above the market price1 whether the market is higher or lower4 ,we shall assume that you have bought from a refiner through your broker a supply of actual sugar at #f4jj4 ,while your sugar is in transit or before it has been shipped by refiners1 the market advances to #h4jj1 at which point it apparently is steady4 ,you now have a theoretical gain of #b4jj--that is1 if you were to sell your sugar at once1 you would have an actual profit of #b4jj2 but you do not sell because your sugar is in transit or you need it for your trade4 ,however1 you do want to preserve and protect this favorable position of having your sugar #b4jj below the market at the time you want to sell it4 ,so you sell the same quantity of futures on the ,exchange at #h4jj4 ,three things may occur--the market may decline1 or it may continue to advance1 or it may remain steady4 ,you have accomplished your purpose in any case 7see ,chart #b74 ,by the time you sell your sugar 7or at the time of its delivery7 it becomes necessary for you to cover your hedge and if the market has declined from #h4jj 7at which point you hedged7 and stands at #f4jj again1 your hedging operations considered alone would net you an actual profit of #b4jj4 ,your original sugar cost was #f4jj4 ,your profit on your hedge was #b4jj1 so that you would figure your actual sugar cost at #d4jj4 ,you would have accomplished your purpose of getting your sugar #b4jj under the market at the time of selling it 7or at the time of its delivery74 ,that is1 your delay in selling your sugar has cost you practically nothing1 even though the market has declined4 ,if the market has advanced to #aj4jj1 when it becomes necessary for you to cover your hedge 7at the time of selling your sugar or when it is delivered7 your hedging operations considered alone would net you a loss of #b4jj4 ,you would buy in futures at #aj4jj1 which you sold at #h4jj4 ,your original sugar cost was #f4jj1 your loss on your hedge was #b4jj1 so that you would figure your actual sugar cost at #h4jj4 ,but the market at that time was #aj4jj1 so that you have accomplished your purpose of getting your sugar #b4jj under the market at the time of selling it 7or at the time of delivery74 ,in other words1 you would make the same profit as though you had re-sold your sugar to second-hands originally1 instead of hedging1 but had you followed this course1 you might not have had sugar in stock for your regular trade4 ,on the other hand1 when it becomes necessary for you to cover your hedge1 if the market has remained steady and is again at #h4jj1 the two futures transactions cancel themselves without profit or loss4 ,your original cost of #f4jj1 therefore1 stands as your actual sugar cost at the time of selling 7or at the time of delivery74 ,this is #b4jj under the market and you have accomplished your purpose4 ,,hedging to establish and limit a loss on an unfavorable purchase4 ,this operation is identical in its working with the previous example1 except that you have a different end in view4 ,,chart #c ---------------------------------------- ---------------------------------- ,,hedging to establish and limit a loss on an unfavorable purchase ---------------------------------------- ----------------------------- ,initial ,transactions ,subsequent ,transactions ,result ---------------------------------------- ----------------------------- ,hedge ,condition of ,price ,result ,figure ,in market when you of actual each you cover pay hedge sugar case your hedge for and cost the futures covering this same to operation way cover hedge ---------------------------------------- ----------------------------- ,you buy ,price paid actual sugar for actual at #f4jj but sugar less before you hedging have ,it has declined ,a profit profit received it to #d4jj #d4jj of #a4jj #f-ae4jj 7or before you sell it7 the price declines to #e4jj ,you now have ,price paid,your your sugar for actualsugar at #a4jj sugar pluscost is above the ,you sell hedging #a4jj market futures ,it has advanced ,a loss of loss above at #e4jj to #f4jj #f4jj #a4jj #fag4jj the market ,you feel ,it stands at ,no profit1 that the #e4jj #e4jj no loss #f4jj market may decline still further and increase this loss1 so-- ---------------------------------------- ----------------------------- ,let us say that you purchase actual sugar at #f4jj4 ,if the market declines to #e4jj after your original purchase at #f4jj1 you have a loss of #a4jj1 in the value of your sugar4 ,facing the possibility of a further decline and desiring to limit this loss to #a4jj1 you hedge by selling futures4 ,in this case you should limit your loss to #a4jj just as effectively as in the previous example you preserved your gain of #b4jj1 and by the same course of procedure4 7,see ,chart #c47 ,by the time it is necessary for you to cover your hedge by buying an equivalent amount of futures1 the market may have declined still further1 say to #d4jj4 ,you sold at #e4jj1 you bought at #d4jj1 profit on that operation1 #a4jj4 ,subtract this profit from your original cost 7#f4jj7 and figure your sugar cost at #e4jj4 ,in other words1 although the market went still lower1 you succeeded in limiting your loss to #a4jj1 as compared with the market price at the time of the delivery of your sugar 7or at the time you sell it74 ,had you omitted the hedge1 your actual sugar cost would have been #f4jj1 which was #b4jj above the market4 ,after your original purchase at #f4jj1 and market decline to #e4jj 7at which point you hedged71 the market might advance again to #f4jj1 or remain steady at #e4jj1 but the operation is no different from that previously described1 and you in each case attain the same result4 ,buying of ,sugar ,futures ,refiners do not make a practice of taking orders more than thirty days in advance of actual delivery--but there are obviously times when it is advisable to cover one's requirements for a longer period4 ,a jobber may do this on the ,exchange where he will always find a seller at some price for the quantity he desires4 ,this privilege is particularly valuable to3 #a4 ,jobbers who believe that the market price of ,sugar is going higher and who desire to cover their future requirements beyond the delay period which refiners will extend4 #b4 ,jobbers1 who desire to sell to manufacturing customers for future delivery at a fixed price so that these manufacturing customers may determine their selling price1 may do so by the use of the ,exchange4 #a4 ,buying of sugar futures--,based upon the expectation of higher prices ,no doubt many jobbers will recall occasions when anticipating their requirements seemed obviously advisable1 perhaps almost imperative4 ,such a jobber would be one who believed in the market4 ,his action would be based on his opinion of the market4 ,he might note in ,january1 let us say1 that the price of ,may or ,july futures is favorable4 ,he would like to get his ,may or ,july sugar at about that figure4 ,you yourself probably can recollect many times in the past1 when the general market was in such a strong position fundamentally that anticipating your requirements seemed advisable4 ,you decided to buy a considerable quantity only to find that refiners would not sell you to the extent that you wished to purchase4 ,when covering your future requirements on the ,exchange1 you can buy any quantity desired4 ,consider also on how many occasions when you wanted and needed a definite future month of shipment1 you have been told that as soon as possible was the only acceptable basis4 ,or have you had the experience of placing an order and waiting twenty-four or thirty-six hours without knowing if the refiner would accept your order8 ,meanwhile the market might have advanced1 and1 if your order had been declined1 you would have had to pay an even higher price for your sugar4 ,the facilities of the exchange offer opportunities for protecting requirements quickly and without the uncertainty and delay sometimes encountered from refiners4 ,a jobber must anticipate the market in order to take full advantage of it1 and in this connection it should be borne in mind that the ,sugar ,exchange1 as in the case of practically all exchanges1 usually anticipates either favorable or unfavorable developments in the market for the actual commodity4 ,consequently1 prompt action is necessary when either a higher or lower market is expected1 as the ,exchange market will usually be the first to reflect changing conditions4 ,suppose you feel that the price of sugar is low and probably going higher4 ,you try to anticipate your requirements for some time to come1 but find that refiners will not sell for more than thirty days4 ,you can go on the ,exchange and buy futures in the quantity and month desired4 ,assume then1 that you pay #f4jj for your futures4 ,now1 whatever happens in the sugar market1 you know you can get the quantity of sugar desired at about #f4jj 7see ,chart #d74 ,the market will advance1 decline or hold steady4 ,say the market advances4 ,when it seems advisable to close out your ,exchange contract and buy actual sugar1 the price may have gone up to #h4jj4 ,you will then sell your futures at about #h4jj1 go into the market and buy actual sugar at the same price1 assuming1 of course1 that the actual market has advanced in relative proportion--which is likely4 ,although actual sugar has cost you #b4jj more than you had figured1 you have made #b4jj on your futures4 ,profit and loss cancel each other4 ,your sugar cost is #f4jj4 ,on the other hand1 suppose the market declines after you have bought futures at #f4jj1 and goes down to #d4jj1 when it seems advisable to close out your ,exchange contract4 ,you sell your futures at #d4jj1 a loss of #b4jj4 ,but you will also buy your actual sugar at #d4jj1 which is #b4jj lower than you had planned4 ,your actual sugar cost was therefore #f4jj1 which is the price you had figured was favorable4 ,if the price still is at #f4jj when you desire to liquidate1 you would sell your futures and buy your actual sugar at about the same price4 ,thus you have neither gained nor lost1 but you have been sure of getting sugar at #f4jj1 which is the price you felt was low4 ,the time to buy actual sugar is generally when the market becomes strong and an advance in the price of the actual commodity seems imminent2 but the time to buy sugar futures is before the strength develops4 ,the future market invariably discounts declines and anticipates advances4 #b4 ,buying of ,sugar ,futures to protect profits on advance sales to customers ,while it may not be an established custom1 we know numerous instances where jobbers have sold sugars in small quantities for future delivery4 ,the examples to which we refer are small manufacturers buying sugar locally1 who1 when the market appears in a strong condition desire to be assured of their regular supply of sugar at a specified price4 ,under such conditions we have known jobbers to sell them sugar for delivery over several months4 ,if at any time you are placed in a similar position1 and desire to take care of your customers in this manner1 without incurring too great a risk1 the ,exchange offers exceptional opportunities for protection1 as1 of course1 you would be able to buy sugar for delivery in any month you desire1 even as far in advance as one year4 ,it is clear that if you sell at a specified price for delivery at a certain time1 your only protection is your belief that you'll be able to buy sugar cheaply enough to make a profit4 ,,chart #d ---------------------------------------- ------------------------------------ ,,buying ,,sugar ,,futures #a4 ,based on the expectation of higher prices4 #b4 ,to establish costs1 pre-determine selling prices and protect profits on advance sales4 ---------------------------------------- ------------------------------------ ,initial ,transactions ,subsequent ,transactions ,sugar ,cost ,result ---------------------------------------- ----------------------------- ,condition ,price ,result ,price ,figure it ,in of market you of you this way each when you would selling pay case buy actual obtain your for the sugar for yourfuturesactual same futures sugar ---------------------------------------- ----------------------------- ,price paid ,your for actual sugar ,a sugar less cost is ,you buy ,sugar,when ,if it has profit hedging #f4jj ,futures at you advanced of profit as pre- #f4jj to coverbuy to #h4jj #h4jj #b4jj #h4jj #h-bf deter- future actual mined requirements2sugar1 ,a ,price paid fix your you ,if it has loss for actual price and sell declined of sugar plus take orders your to hedging loss on the basis fu- #d4jj #d4jj #b4jj #d4jj #dbf of #f sugar tures ,if it is ,no still at profit1 #f4jj #f4jj no loss #f4jj #f4jj ---------------------------------------- ----------------------------- ,it is equally clear that if a manufacturer names a price and takes advance orders without pre-determining his sugar cost1 his profit is a matter of guesswork4 ,he is not going to know the cost of his manufactured product until he buys his sugar4 ,assume that you have contracted to deliver sugar to a manufacturer or to any customer at a definite date and a specified price1 without buying sugar to cover your requirements4 ,if the price of sugar is favorable when you deliver it1 you are fortunate and net a profit4 ,but sugar may have advanced to a point where you are forced to pay such a price that your profit is lower than it should be4 ,in fact there may not be any profit at all4 ,by conservative1 wise use of the ,sugar ,exchange1 most of this risk and uncertainty can be eliminated and both you and your customer can go ahead with your plans with your prices determined through a known sugar cost4 ,suppose that in ,march or ,april1 for example1 the market appears strong and you find that some of your manufacturing customers are anxious to be assured of an adequate supply of sugar at a definite price4 ,in such a case1 if these advance orders called for a sufficient volume1 and provided ,exchange prices were favorable1 you could take care of your trade's future requirements at a fixed price1 without yourself taking a speculative position4 ,we also believe that buyers making these arrangements with any of their trade would be justified in requesting the same proportionate marginal protection which it is necessary for jobbers themselves to give the seller on the ,exchange4 ,there will no doubt be many occasions when it would be worth while to solicit orders on this basis4 ,with your own sugar cost fixed by the use of the ,exchange1 you could take proper care of these buyers without worrying about subsequent fluctuations of the market1 as you would know that your sugar cost would be about the price paid for your futures which1 let us say1 is #f4jj4 7,see ,chart #d47 ,the market may advance so that by ,september1 sugar is selling at #h4jj4 7,you are now making deliveries to your trade as contracted74 ,so you sell your futures at #h4jj1 go into the market and buy actual sugar for about the same figure1 assuming1 of course1 that actual sugar has also advanced in relative proportion1 which is likely4 ,you pay #b4jj more for your actual sugar than you had figured but you have profited to the extent of #b4jj on the sale of futures4 ,profit and loss cancel each other and you have your sugar at #f4jj4 ,in other words1 although the market is now #h4jj you are delivering #f4jj sugar to your customers1 with a profit to yourself4 ,if the market declines after your original purchase at #f4jj so that in ,september sugar is selling at #d4jj1 you will sell your futures at #d4jj1 taking a loss of #b4jj4 ,but you will buy your actual sugar at about #d4jj1 also1 which is #b4jj lower than you planned for4 ,this gain of #b4jj1 while not to be termed an actual profit1 may certainly be considered as canceling the loss on the sale of your futures1 so that the cost of your sugar is really #f4jj1 your original price4 ,another way of looking at this is to add the loss of #b4jj on the sale of your futures to #d4jj1 the cost of your actual sugar1 making #f4jj1 the price upon which you had based your plans4 ,if you had waited1 you would have been able to get your sugar for #d4jj1 but by buying it ahead you have had the benefits of protection and the elimination of speculation and risk4 ,if the market remains steady after your ,june purchase1 or after various fluctuations1 returns to #f4jj by ,september1 you sell your futures at #f4jj and buy spot sugar for about the same amount4 ,thus you have neither gained nor lost1 but you have been protected in your sugar cost4 ,this is essentially a playing-safe operation4 ,it results in profit insurance for the jobber who is willing to sacrifice the possibility of a speculative gain on advance sales to customers4 ,it is thoroughly sound business policy and is neither expensive nor difficult to carry out4 ,point of ,delivery ,although ,chicago is the delivery point in all ,exchange contracts for refined sugar1 it should be plainly understood that the ,exchange is for anyone1 anywhere4 ,whether located in ,chicago1 or in ,rochester1 ,baltimore1 ,new ,york or even ,san ,francisco1 a jobber can advantageously use the ,exchange4 ,deliveries of ,refined ,sugar ,futures will be made only from the ,exchange-licensed warehouses in ,chicago4 ,but1 regardless of the prospective buyer's location1 the delivery point is not of any material importance as it is an established fact that in operations on all exchanges the percentage of actual deliveries taken is exceptionally small4 ,in fact1 the examples used in this booklet are all based on the supposition that the buyer may find it more convenient not to take delivery4 ,the usual procedure followed in sugar exchange operations is for the buyer to close out his exchange transaction prior to the period calling for delivery and purchasing actual sugar from the refiners1 executing both transactions practically simultaneously4 ,possibly the most important problem in connection with the organization of any commodity exchange is to reduce the possibility of corners1 however remote1 to the smallest possible degree4 ,in the case under discussion1 the ,chicago delivery point1 by virtue of its accessibility for producers and consumers from all parts of the country1 operates to that end4 ,practically every refiner of cane sugars in the ,east and ,west1 as well as the ,southern refiners1 carries large stocks in ,chicago1 and its favorable location in connection with the beet sugar industry also makes it highly desirable4 ,its situation in regard to the offerings of the ,louisiana producers is also an additional protection and advantage of considerable importance4 ,the ,exchange-licensed warehouses in ,chicago are under the direct and constant supervision of ,exchange representatives4 ,facilities are provided for testing and grading sugar so as to maintain ,exchange quality standards4 ,when are ,refiners' ,prices and ,exchange ,quotations in line8 ,since exchange quotations for refined sugar futures are net cash ex-exchange-licensed warehouse1 ,chicago1 while refiners' quotations are f4o4b4 refinery1 less #b for cash1 it is obvious that there must be a difference between refiners' prices and exchange quotations4 ,it is equally obvious that the differential should approximate the freight rate between ,chicago and the ,seaboard1 where the refiners are located1 with allowance also for the cash discount4 ,when the markets are in line such is the case4 ,conversely1 when the differential is higher or lower1 the markets are out of line4 ,therefore1 in order to tell whether the markets are out of line1 or to what extent1 it is necessary to determine on a differential to represent the normal difference between the two markets4 ,there is no one figure1 however1 that will satisfy all conditions at all times1 for the reason that there are various freight rates between the ,seaboard and ,chicago4 ,it is inaccurate1 for instance1 to use #fc as the basis for the normal differential4 ,the #fc rate is one rate--the all-rail freight rate from ,new ,york to ,chicago4 ,other important routes and rates are as follows3 ,routing3 ,freight ,rate3 ,new ,orleans--,chicago 7barge and rail7 #j4eja ,new ,york--,chicago 7rail and lake7 4#eh ,new ,orleans--,chicago 7all rail7 4#fj ,philadelphia--,chicago 7all rail7 4#fa ,new ,york--,chicago 7all rail7 4#fc ,savannah--,chicago 7all rail7 4#fc ,boston--,chicago 7all rail7 4#fc #a ,the cheapest routing 7#dh7 takes about two weeks' more time in transit than the ,new ,york all-rail routing 7#fc74 ,interest charges on finances involved1 etc41 for this extra period will bring the expense of this routing to approximately #ej4 ,after a study of the amounts of sugar shipped over these various routes we have arrived at an arbitrary figure to represent the normal differential between refiners' prices and exchange quotations4 ,we believe that #eg will serve as a safe basis for calculation1 but #eh or #ei might be equally--or more--accurate4 ,in fact1 anyone is entitled to an opinion4 #eg is our opinion4 ,it is not an average of freight rates1 but is an arbitrary figure4 ,when the markets are in line1 using #eg as a basis for calculation1 #b should be deducted from refiners' prices1 and #eg added to determine what ,exchange quotation should be4 ,conversely1 #eg should be deducted from ,exchange quotations and #b added to determine what refiners' prices should be4 ,if you are willing to accept #eg as a safe figure1 you may find the following chart useful in determining the condition of the market3 ,,are ,,refiners' ,,prices ,,and ,,exchange ,,quotations ,,in ,,line8 ,based on a #eg differential and #b cash discount ,when ,exchange ,refiners' ,quotations ,prices ,are ,should ,be #d #d4di #d4je #d4ed #d4aj #d4ei #d4ae #d4fd #d4bj #d4fi #d4be #d4gc #d4cj #d4gh #d4ce #d4hc #d4dj #d4hh #d4de #d4ic #d4ej #d4ih #d4ee #e4jc #d4fj #e4jh #d4fe #e4ac #d4gj #e4ah #d4ge #e4bb #d4hj #e4bg #d4he #e4cb #d4ij #e4cg #d4ie #e4db #e4jj #e4dg #e4je #e4eb #e4aj #e4eg #e4ae #e4fb #e4bj #e4fg #e4be #e4ga #e4cj #e4gf #e4ce #e4ha #e4dj #e4hf #e4de #e4ia #e4ej #e4if #e4ee #f4ja #e4fj #f4jf #e4fe #f4aa #e4gj #f4af #e4ge #f4bj #e4hj #f4be #e4he #f4cj #e4ij #f4ce #e4ie #f4dj #f4jj #f4de #f4je #f4ej #f4aj #f4ee #f4ae #f4fj #f4bj #f4fe #f4be #f4fi #f4cj #f4gd #f4ce #f4gi #f4dj #f4hd #f4de #f4hi #f4ej #f4id #f4ee #f4ii #f4fj #g4jd #f4fe #g4ji #f4gj #g4ad #f4ge #g4ah #f4hj #g4bc #f4he #g4bh #f4ij #g4cc #f4ie #g4ch #g4jj #g4dc #g4je #g4dh #g4aj #g4ec #g4ae #g4eh #g4bj #g4fc #g4be #g4fg #g4cj #g4gb #g4ce #g4gg #g4dj #g4hb #g4de #g4hg #g4ej #g4ib #g4ee #g4ig #g4fj #h4jb #g4fe #h4jg #g4gj #h4ab #g4ge #h4af #g4hj #h4ba #g4he #h4bf #g4ij #h4ca #g4ie #h4cf #h4jj #h4da #h4je #h4df #h4aj #h4ea #h4ae #h4ef #h4bj #h4fa #h4be #h4fe #h4cj #h4gj #h4ce #h4ge #h4dj #h4hj #h4de #h4he #h4ej #h4ij #h4ee #h4ie #h4fj #i4jj #h4fe #i4je #h4gj #i4aj #h4ge #i4ad #h4hj #i4ai #h4he #i4bd #h4ij #i4bi #h4ie #i4cd #i4jj #i4ci #i4je #i4dd #i4aj #i4di #i4ae #i4ed #i4bj #i4ei #i4be #i4fc #i4cj #i4fh #i4ce #i4gc #i4dj #i4gh #i4de #i4hc #i4ej #i4hh #i4ee #i4ic #i4fj #i4ih #i4fe #aj4jc #i4gj #aj4jh #i4ge #aj4ab #i4hj #aj4ag #i4he #aj4bb #i4ij #aj4bg #i4ie #aj4cb #aj4jj #aj4cg 7,this chart works both ways4 ,that is1 when the exchange quotation is given1 if the markets are in line the refiners' prices should be as shown in the first column47 ,it should be borne in mind that the above calculations are based upon a normal difference in price of #bj per hundred pounds between beet and cane sugars1 which is the ruling difference as quoted in the ,exchange contract4 ,should beet refiners elect to sell at greater discounts than #bj points under cane refiners' ,seaboard prices1 the amount in excess of #bj points would have to be subtracted from our arbitrary figure of #eg4 ,the ,function of the ,sugar ,broker ,if you should organize your company so that it could attend to all the details of sugar buying economically1 you would probably still profit from the assistance of a sugar broker whose specialty is sugar buying1 whose horizon is a sugar horizon1 whose thoughts are sugar thoughts and who must necessarily know more about sugar than the average buyer would ever consider it desirable to know4 ,the sugar broker's service to you is unaffected by prices--his prices and all other brokers' prices are the ,exchange prices2 his commissions are based on the same percentages as all other brokers' commissions4 ,his only distinction can come from the actual service he can render4 ,this service may be good or poor1 depending upon whether his experience1 his organization1 his information and his judgment are good or poor4 ,if1 added to his knowledge of sugar1 he also possesses a broad knowledge of economic fundamentals and a perspective upon and contact with world activities as they affect all phases of the business of sugar1 his service will be many times more valuable than if he were limited by a small organization1 by a definite locality or by experience in only a few phases of this business4 ,a sugar broker who merely accepts and transacts orders is giving no service worth the name4 ,to give service in accordance with the highest modern standards1 he must stand as an adviser1 as a constant seeker after opportunities which will benefit his clients1 as a partner whose interest in his clients' profits and progress equals his interest in his own4 ,our experience has convinced us that the client secures the greatest amount of protection in filling his sugar needs when one broker handles all sugar transactions4 ,these exchange operations should be carried out when the market is out of line in your favor4 ,you need the best kind of advice1 based on an intimate knowledge of your business4 ,a single brokerage house becomes thoroughly acquainted with the client's business and personnel1 with the result that the two organizations work in harmony virtually as partners1 confusion and misunderstandings are avoided1 quicker and more advantageous transactions are made possible4 ,the choice of that broker should be a matter of great care1 for in addition to the willingness to serve1 he must have the facilities and the financial stability4 ,for1 bear in mind that the broker with whom you deal is the responsible party for the fulfillment of the contract4 ,your contract is as good only as the reliability of your broker4 ,lamborn ,company has become known throughout this country and abroad as an institution for the service of all those who have a business interest in sugar4 ,lamborn ,sugar ,service is rendered through our head office at #acb ,front ,street1 ,new ,york1 and through branch offices in ,philadelphia1 ,chicago1 ,savannah1 ,new ,orleans1 ,kansas ,city1 ,mo4 and ,san ,francisco4 ,lamborn ,service in all its phases is available to you as a jobber4 ,we shall be very glad to explain either in person or by letter what a brokerage relationship with us involves1 how it may be accomplished and how transactions may be carried out4 ,,lamborn ,,company ,sugar ,headquarters #acb ,front ,street3 ,new ,york #g ,wall ,street3 ,new ,york 7,securities7 ,havana and ,cienfuegos1 ,cuba ,paris1 ,france ,,the ,,lamborn ,,company ,,lamborn ,,cie ,branches in the ,united ,states ,philadelphia ,savannah ,new ,orleans ,chicago ,kansas ,city ,san ,francisco ,members of3 ,new ,york ,coffee ,sugar ,exchange1 ,inc4 ,new ,york ,stock ,exchange ,new ,york ,cotton ,exchange ,new ,york ,produce ,exchange ,chicago ,board of ,trade ,london ,produce ,clearing ,house1 ,ltd4 ,cable ,address3 ,lamborn ,contract between ,members of the ,new ,york ,coffee and ,sugar ,exchange1 ,inc4 ,the ,standard ,fine ,granulated ,sugar contract is as follows3 ,sold for 444 to 444 #hjj bags 7of #ajj lbs4 net each7 of ,standard ,fine ,granulated ,sugar at 444 cents per pound1 manufactured in the ,united ,states or insular possessions1 packed in cotton-lined burlap bags1 deliverable from licensed warehouse in ,chicago between the first and last days of 444 inclusive4 ,delivery within such time to be at ,seller's option1 upon seven1 eight or nine days' notice to the buyer4 ,if ,domestic ,beet ,standard ,fine ,granulated ,sugar be delivered in fulfillment of this contract1 ,seller to make an allowance of #bj per #ajj lbs4 ,the ,seller shall have the right to deliver ,foreign ,cane ,standard ,fine ,granulated ,sugar in fulfillment of this contract by making an allowance to the ,buyer of #be per #ajj lbs41 and foreign beet standard fine granulated sugar by making an allowance of #de per #ajj lbs41 provided such sugars comply with the ,types adopted as ,standard by the ,new ,york ,coffee and ,sugar ,exchange1 ,inc41 and all duties have been paid thereon4 ,this contract is subject to an adjustment for duty1 as provided in the ,sugar ,trade ,rules4 ,either party to have the right to call for margins as the variations of the market for like deliveries may warrant1 which margins shall be kept good4 ,this contract is made in view of and in full accordance with the ,by-,laws1 ,rules and ,conditions established by the ,new ,york ,coffee and ,sugar ,exchange1 ,inc4 7,written across the face is the following7 ,for and in consideration of one dollar to 444 in hand paid1 receipt whereof is hereby acknowledged 444 accept this contract with all its stipulations and conditions4 ,brokers' ,commissions ,the broker's commission for either buying or selling each contract of #hjj bags of sugar depends upon the price at which the transaction is executed4 ,the following table gives a range of prices and the corresponding commissions3 ,for the sale or purchase of each lot of #hjj bags3 ,contract ,price ,commission#b ,up to #i4ii1 per pound #ae4jj #aj to #ab4ii1 #ag4ej #ac to #ag4ii1 #bj4jj #ah and above1 #be4jj #b ,these commissions apply to transactions in the ,united ,states1 ,porto ,rico and ,cuba1 from non-members of the ,new ,york ,coffee and ,sugar ,exchange1 ,inc4 ,minimum ,trading ,basis ,a lot of refined sugar consists of #hjj bags of #ajj lbs4 each1 or #hj1jjj lbs4 ,this is the minimum amount which can be sold on the ,exchange4 ,delivery ,the date upon which sugar shall be delivered on an ,exchange contract is at the option of the seller1 provided that date come within the month named in the contract4 ,notice of the date of delivery must be given to the buyer seven1 eight or nine days preceding the day on which delivery will be made4 ,if you are not going to fill your actual sugar needs by accepting delivery from the ,exchange warehouses1 you should close out your contracts within two weeks1 or1 at the latest1 ten days of the first of the month in which delivery is specified1 as after notification of delivery has been given1 there is usually not sufficient time to make other plans4 ,orders ,except in nearby localities1 orders should be sent by wire1 addressed to3 ,,sugar ,,futures ,,department1 #acb ,front ,street1 ,new ,york1 ,n4,y4 ,inquiries or orders will be given prompt attention at any of our offices1 but time will be saved and execution facilitated if they are sent direct to ,new ,york4 ,unless otherwise specified1 orders are good only for the day on which they are received4 ,if they cannot be executed at the price named before the closing of the ,exchange on that day1 or if they should arrive after the ,exchange closes1 it will be understood that they are automatically cancelled unless specific instructions are given for the execution the following day or unless formally renewed by wire4 ,if you desire to place an order1 good until countermanded1 you can do so4 ,the general term applied to such orders is order good till cancelled4 ,the general abbreviation in the trade is ,g4,t4,c4 ,exchange ,trading ,hours ,hours for trading on the ,exchange are from #aa3jj a4m4 to #b3ej p4m41 except on ,saturdays4 ,saturday hours are from #aj3cj a4m4 to #aa3ej a4m4 ,delivery and ,warehousing ,charges ,if you make delivery on the exchange1 the following are your charges3 ,storage #c per #ajj lb4 bag ,handling in and out1 charged with first month's storage #e per #ajj lb4 bag ,negotiable warehouse receipt #ej ,if you accept delivery on the exchange1 your charges are3 ,carloading #a-a_/d per #ajj lb4 bag ,acceptance of your order ,the form of our acceptance of your order reads as follows3 ,in accordance with your instructions we have this day made the following transactions in ,,standard ,,fine ,,granulated ,,sugar for your account and risk1 subject in all respects1 and in accordance with1 the ,rules1 ,by-,laws1 ,regulations and ,customs of ,,the ,,new ,,york ,,coffee ,,and ,,sugar ,,exchange1 ,inc41 and the ,rules1 ,regulations and ,requirements of its ,board of ,directors1 and all amendments that may be made thereto4 ,all transactions made by us for your account contemplate the actual receipt and delivery of the ,,sugar and payment therefor4 ,the right is reserved to close transactions when margins are exhausted or nearly so1 without notice4 ,bags of ,refined ,sugar ,month of ,delivery ,price ---------------------------------------- ------- ,bought ,sold --------------------- ,raw ,sugar ,futures ,prior to the inauguration of trading in ,refined ,futures1 ,raw ,sugar ,futures were used by many jobbers for hedging and protecting their ,refined requirements4 ,the theory of operation is that the raw price will be about equivalent to the refined price after duty and the charge for refining are added4 ,while the ,raw ,sugar market will at times get out of line with refined1 both favorably and unfavorably1 this cannot continue for any long period4 ,when the ,raw ,futures market is favorably out of line1 it may be more to your advantage to use this market1 rather than the ,refined ,futures market4 ,at the present time there is the added advantage that the volume of trading is greater in ,raw than in ,refined4 ,when buying or selling ,raw ,sugar ,futures1 you may figure that the variation on a minimum lot of #ej tons would be equivalent to the same variation of #aabj bags or #cbj barrels4 ,we give you below herewith details of contract and trading conditions3 ,all contracts for future delivery shall be for #ej tons of #b1bdj pounds each and multiples thereof4 ,,contracts3 ,sold for 444 to 4441 #ej tons of #b1bdj pounds each of sugar in bags1 deliverable from licensed warehouse in the port of ,new ,york1 between the first and last days of 444 inclusive4 ,the delivery within such time to be at seller's option1 upon #g1 #h or #i days' notice to the buyer4 ,the sugar to be of any grade or grades of ,raw sugars based on ,cuban ,centrifugal of #if degrees average polarization outturn at the price of 444 cents per pound in bond1 net cash with additions or deductions for other grades according to the rates of the ,new ,york ,coffee and ,sugar ,exchange1 ,inc41 existing upon the afternoon of the day previous to the date of notice of delivery1 and shall embrace all ,centrifugals first running4 ,the foreign sugars deliverable other than ,cuban ,centrifugals1 are3 ,centrifugals from ,british ,west ,indies1 ,demerara1 ,surinam1 ,san ,domingo1 ,brazil1 ,peru1 ,java1 ,mauritius1 ,venezuela and ,haiti1 all basis of #if degrees average polarization outturn at 4#beab cents per pound 7difference in duty7 less2 but no lot of #ej tons is to consist of sugar from more than one country of origin4 ,allowances on ,centrifugal sugars to be 4#jcabe cents per pound per degree above #if degrees1 up to #ih degrees and 4#jfbe cents per pound per degree below #if degrees1 down to #id degrees and 4#jicge cents per pound per degree below #id degrees1 down to #ib degrees1 with fractional degrees pro rata4 ,exchange ,trading ,hours ,hours for trading in ,raw ,sugar ,futures are from #aj3de a4m4 to #b3de p4m4 on week days and from #aj3ae a4m4 to #aa3de a4m4 on ,saturdays4 ,trading ,differences ,a fluctuation of #a per #ajj pounds is equivalent to #aa4bj per lot of #ej tons4 ,margins ,an original margin in ,new ,york funds must accompany all orders1 we reserving the right to call for variation margins when contract shows depreciation4 ,we also reserve the right to close transactions when margins are exhausted or nearly so without further notice4 ,the amount of this original margin will of necessity fluctuate with conditions existing at the time orders are placed4 ,at the present time in localities that are in position to make prompt remittance for any variation margins required1 the margin is #djj4 ,commissions ,for either buying or selling each contract of #ej tons ,based upon a price ,below #d cents #ab4ej #d cents to #i4ii #ae4jj #aj cents to #ab4ii #ag4ej #ac cents to #ag4ii #bj4jj #ah cents and above #be4jj ,,note3 ,all orders for ,raw ,sugar ,futures shall be in accordance with the ,by-,laws and ,rules of the ,new ,york ,coffee and ,sugar ,exchange1 ,inc4 and the ,new ,york ,coffee and ,sugar ,clearing ,association1 ,inc4