SETTLEMENT OF CONTRACTS BY OFFSET
15. To quote from the rules of the Chicago Board of Trade:
In case it shall appear that the delivery of any outstanding trade or contract between members of the association may be offset by some other corresponding trade or contract, made by the parties with other members of the association; and the parties to such trade or contract, or their authorized agents, consent to such offset, such trade or contract shall be deemed to have been settled; any balance between the current value of the property covered by such trade or contract, and the several contract prices shall be due and payable immediately by the party from whom such balance may be due, to the party entitled to receive the same under his contract.
This is the rule applying to ring settlements hereinbefore described. To quote further:
The current market value of the property contracted for shall be conspicuously posted, at a stated hour each day, under the direction of the Board of Directors, in the Exchange Hall and in the Settlement Room of the Board, which posting shall serve as a basis for the adjustment of all contracts settled, as herein provided on that day.
"ADJUSTMENT OF BALANCES ON SETTLEMENT
In order to facilitate the operation of this section, each member is required to keep a settlement book, in which shall be entered the names of parties with whom settlements have been made and the dates and terms of the trades included in such settlement, and the terms of such settlements, and the prices at which the commodities were originally sold or purchased, and the amounts due to or from him or them on each separate settlement, also the net amount due to or from him or them on all settlements.
"CLEARING HOUSE AND REPORTS
The Board of Directors is hereby authorized to provide a suitable office, with the necessary employes, to which members shall be required, at stated hours each day, to make reports, showing the net balance due to or from each member, as shown by such settlement book, and also the general balance due to or from him or them upon all such settlements; each report to be accompanied with an acceptable check for the balances, if any, due from him or them on the contracts so settled; whereupon, if said report is found to be correct, as compared with other reports rendered him, the person in charge of said office shall, at a stated hour each day, pay to each of the parties making such report any balances which he may have collected, and which shall appear to be due to them by said reports, less such charges as shall be prescribed by the Board of Directors as compensation for the services of said office.
"CONFIRMATION OF TRANSACTIONS FOR FUTURE
DELIVERY, ETC.
It shall be the duty of each member or firm making a transaction for future delivery of grain or flax-seed in five thousand or one thousand bushel lots, lard and pork in two hundred and fifty or fifty package lots, and D. S. short ribs and D. S. extra short clears in lots of fifty thousand or twenty-five thousand pounds, under the Rules of the Association, to confirm such transaction by sending to the clearing house a memorandum of the same by 6 o'clock P. M. of the day on which it is made; such memorandum shall be in writing, and shall state on its face the date of the transaction, the quantity and kind of property covered by the same, the month of delivery, the price, and the name of the party to whom sold or of whom bought, and shall be signed by the party or firm making the same. All transactions of the same date made with any member or firm may be included in one memorandum, and all such memoranda shall be sent to the clearing house by the member or firm making the same, in unsealed envelopes addressed to the member or firm with whom such transactions were made. It shall be the duty of the clearing house manager to assort and have ready for delivery by 8 o'clock A. M. of the following day, and to deliver, on application, all envelopes containing such memoranda as are left with him in compliance with this section.
There is a fine imposed upon any member failing to comply with the above provisions.
"FAILURE TO DELIVER OR RECEIVE ON CONTRACT
In case any property contracted for future delivery is not delivered at maturity of contract, the purchaser may, if he shall so elect, consider the contract forfeited; or he may purchase the property on the market for the account of the seller, by 1:15 o'clock P. M. of the next business day, notifying him at once of such purchase; or he may require a settlement with the seller at the average market price on the day of maturity of contract, and any damages or loss due to the purchaser, by reason of such purchase or declared settlement, shall be due and payable by the seller immediately.
A SECTION IN THE GENERAL OFFICES OF THE SIMMONS HARDWARE COMPANY, ST. LOUIS, MO.
In case any property contracted for future delivery is not received and paid for when properly tendered, it shall be the duty of the seller, in order to establish any claim on the purchaser, to sell it on the market at any time during the next twenty-four hours, at his discretion, after such default shall have been made, notifying the purchaser within one hour of such sale; and any loss resulting to the seller shall be paid by the party in default.