Page 1 

Commodity Futures Trading Commission 

CEA CASES 

NAME: SECRETARY OF AGRICULTURE V. ELMER C. KIMBALL 

DOCKET NUMBER: 17 

DATE: AUGUST 26, 1940 

DOCUMENT TYPE: DECISION AND ORDER 

DEPARTMENT OF AGRICULTURE 

Washington, D. C. 

UNITED STATES OF AMERICA 

BEFORE THE SECRETARY OF AGRICULTURE 

Docket No. CE-A 17 

Secretary of Agriculture, Complaint, v. Elmer C. Kimball, Respondent. 

Proceedings, Findings of Fact, Conclusions, and Order.

PROCEEDINGS

On February 3, 1940, complaint was issued by the Assistant Secretary of 

Agriculture, pursuant to the provisions of the Commodity Exchange Act (7 U. S. 

C. and Supp. V, §§ 1-17c), against Elmer C. Kimball. It was alleged that the 

respondent, Kimball, was registered as a futures commission merchant, was a 

member of the Chicago Board of Trade, and, without prior consent of customers, 

had taken the other side of customers' orders for futures in commodities named 

in the act. A hearing was set for February 26 in Washington, D. C. The 

complaint was served upon the respondent by registered mail on February 7. On 

February 23, Jack W. Bain, of the Solicitor's Office, who had been appointed 

referee by the 

Assistant Secretary, continued the hearing until March 5, and by wire advised 

the respondent that he should request it if he desired a hearing at a place 

other than Washington. On the same day, the respondent requested a hearing in 

Chicago and a continuance of six weeks to allow him to take a trip for his 

health. On February 29, the referee continued the hearing to Chicago without 

date, and on April 9, after the respondent returned from his trip, act it for 

April 30. On April 23, James J. Coughlin wrote Dr. J. W. T. Duvel, Chief of the 

Commodity Exchange Administration, that the respondent had that afternoon 

employed him as counsel, and requested a continuance because of counsel's market 

commitments and other engagements. On April 24, the referee denied this request 

for continuance. 

The hearing was held before the referee on April 30, 1940, at 332 South 

LaSalle Street, Chicago. Charles W. Buoy, Office of the Solicitor, Department 

of Agriculture, appeared for the Government, and James J. Coughlin, Chicago, for 

the respondent. Judicial notice was taken of the designation of the Chicago 

Board of Trade as a contract market and of the respondent's registration as a 

futures commission merchant and floor broker for the years 1939 and 1940. It 

was agreed that the respondent was no longer a member of a contract market and 

that he had returned his 1940 registration certificate to the Commodity Exchange 

Administration. Respondent's counsel then moved to dismiss the complaint on the 

grounds that: (1) the complaint was not issued by the Secretary himself and does 

not recite that the Secretary believes that the net was violated; 
Page 2 

(2) the question is moot because the respondent is no longer a member of a 

contract market and has surrendered his registration certificate; and (3) the 

provisions of the net authorizing denial of trading privileges on contract 

markets are unconstitutional as they seek to deprive persons of property without 

due process of law. He said that he had not prepared the case for trial because 

sufficient time had not been given. The referee denied the motion to dismiss, 

Mr. Coughlin withdrew from the hearing "for the time being," after the referee's 

statement that the case would proceed, and the Government presented its 

evidence. The respondent did not appear in person, and, after Mr. Coughlin's 

withdrawal, was not represented by anyone present. 

The Government introduced, as exhibits, trading cards and other records of 

various commission firms pertaining to May wheat futures trades made on the 

Chicago Board of Trade on December 16, 19, and 20, 1939, and a Government 

accountant's tabulation of trades executed by the respondent, as shown by those 

records. These exhibits, with the testimony of witnesses who identified them 

and explained various parts of them, show that the respondent, as floor trader, 

in many instances took the other side of a trade which he executed for a 

customer and cleared the two sides of the trade through different clearing 

members. Mr. Emmett George Barker testified that the respondent did not, in any 

instance, have the consent of the customer to take the other side of the trade. 

Mr. William B. Bosworth testified that the respondent became a member 

of the Chicago Board of Trade in 1918 and was a member in good standing in 

December 1939. 

After the hearing was closed, the referee served his report upon the 

respondent by registered mail and upon Dr. Duvel and Mr. Buoy. A period of 20 

days was given for filing exceptions, briefs, and request for oral argument 

before the Secretary. The time has olapsed, and none has been filed. 

FINDINGS OF FACT

1. On December 16, 19, and 20, 1939, Elmer C. Kimball, the respondent, was, 

but on April 30, 1940, was not, a member of The Board of Trade of the City of 

Chicago, a contract market. 

2. The respondent registered with the Secretary of Agriculture as a futures 

commission merchant and floor broker, under the Commodity Exchange Act (7 U. S. 

C. and Supp. V, §§ 1-17a), for the years 1939 and 1940, and his registration has 

not heretofore been suspended or revoked. 

3. On December 16, 1939, the respondent had orders to sell two job lots 

(1,000 bushels each) of May wheat futures at 104, one at 104-1/4, one at 104-

3/8, seven at 104-1/2, one at 104-5/8, one at 104-3/4, eight at 104-7/8, and 

three at 105, on the Chicago Board of Trade, for various customers of James E. 

Bennett & Company, a clearing member of the exchange. He did not have the 

consent of that company or of any of its customers to become the buyer with 

respect to any sale. He became the buyer in each instance, for 

his own account carried with Alex McD. Simons, a clearing member of the 

exchange. 

4. On December 19 and 20, 1939, the respondent took similar action with 

respect to various customers' orders to sell jobs in Chicago May wheat futures, 

under similar circumstances except that the prices were different. 

5. On December 20, 1939, the respondent took similar action with respect to 

various customers' orders for jobs in Chicago May wheat futures, under similar 

circumstances except that the prices were different, the customers' orders were 

to buy, and he had no consent to become the seller. 
Page 3 

CONCLUSIONS

The uncontradicted evidence shows that the respondent became the buyer in 

respect to selling orders, and the seller in respect to buying orders, of 

customers without their prior consent, in violation of section 4b of the act. 

It is concluded that, because of these violations, his registration should be 

revoked and his trading privileges on contract markets denied. 

ORDER

IT IS ORDERED that the registration of Elmer C. Kimball as futures commission 

merchant and floor broker for the year 1940 be, and it is hereby, revoked. 

IT IS FURTHER ORDERED that all contract markets refuse Elmer C. Kimball all 

trading privileges thereon until further notice by the Secretary of Agriculture. 

IT IS FURTHER ORDERED that a copy hereof be sent by registered mail to the 

respondent and to each contract market, and that this order shall become 

effective 10 days after its date. 

(SEAL) 

Done at Washington, D. C., this 26th day of August 1940. Witness my hand and 

the seal of the Department of Agriculture. 

(Signed) 

GROVER B. HILL 

Assistant Secretary of Agriculture. 

LOAD-DATE: December 15, 2008 
Page 4