COTTON FUTURES
377
Src. 5. That no tax shall be levied under this act on
any contract of sale mentioned in section three hereof
if the contract comply with each of the following condi-
tions:
First. Conform to the requirements of section four of
and the rules and regulations made pursuant to, this act.
Second. Specify the basis grade for the cotton in-
volved in the contract, which shall be one of the grades
for which standards are established by the Secretary of
Agriculture, except grades prohibited from being de-
tivered on a contract made under this section by the fifth
subdivision of this section, the price per pound at which
the cotton of such basis grade is contracted to be bought
or sold, the date when the purchase or sale was made,
and the month or months in which the contract is to be
fulfilled or settled: Provided,” That middling shall be
deemed the basis grade incorporated into the contract
if no other basis grade be specified either in the contract
or in the memorandum evidencing the same.
Third. Provide that the cotton dealt with therein or
delivered thereunder shall be of or within the grades for
which standards are established by the Secretary of Ag-
riculture except grades prohibited from being delivered
on a contract made under this section by the fifth subdi-
vision of this section and no other grade or grades.
Fourth. Provide that in case cotton of grade other
than the basis grade be tendered or delivered in settle-
ment of such contract, the differences above or below the
contract price which the receiver shall pay for such
orades other than the basis grade shall be the actual
commercial differences. determined as hereinafter pro-
vided.
Fifth. [Amended by sec. 6, act of March }, 1919 (40 Deliveryofpro
Stat., 1350).] Provide that cotton that, because of the us
presence of extraneous matter of any character, or irregu- clusion modified
larities or defects, is reduced in value below that of low
middling, or cotton that is below the grade of low mid-
dling, or, if tinged, cotton that is below the grade of strict
middling, or, if yellow stained, cotton that is below the
orade of good middling, the grades mentioned being of
the official cotton standards of the United States, or cot-
ton that is less than seven-eighths of an inch in length
of staple, or cotton of perished staple or of immature
staple, or cotton that is “ gin cut ” or reginned, or cotton
that is “ repacked ” or “ false packed ” or “ mixed packed ”
or “water packed,” shall not be delivered on. under. or
in settlement of such contract.
Prior to the amendment of March 4. 1919, the fifth para-
graph read as follows:
Fifth. Provide that cotton that, because of the presence
of extraneous matter of any character or irregularities or
defects, is reduced in value below that of Good Ordinary,
or cotton that is below the grade of Good Ordinary, or, if
Hneed cotton that is below the grade of Low Middling,
735
Tax not to be
levied on con-
tracts complying
with conditions
areseribed.