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Commodity Futures Trading Commission 

CEA CASES 

NAME: RALPH W. MOORE 

CITATION: 9 Agric. Dec. 1299 

DOCKET NUMBER: 47 

DATE: NOVEMBER 15, 1950 

DOCUMENT TYPE: DECISION AND ORDER 

UNITED STATES DEPARTMENT OF AGRICULTURE

BEFORE THE SECRETARY OF AGRICULTURE

AGRICULTURE DECISIONS

(No. 2606) 

In re RALPH W. MOORE. CEA Doc. No. 47. Decided November 15, 1950. 

Denial of Trading Privileges -- Violations of Act and Regulations thereunder

Where respondent, a trader in commodity futures, had been charged with 

preparing and circulating a purported memorandum to the press containing false 

and misleading information with respect to Government purchases of lard, with 

attemping to manipulate the price of this commodity, and with failing to report 

transactions in certain accounts which he owned or controlled, all in violation 

of the act and the regulations thereunder, and the respondent's defense, among 

others, was that the information distributed by him was true and misled no one, 

and that he neither owned nor controlled the accounts in question, the Judicial 

Officer held that the Government had proved its charges and ordered a denial of 

all trading privileges on all contract markets to the respondent for a period of 

90 days, commencing on January 1, 1951. 

Charges of Violation of Act Established by Evidence

The evidence in the record is more than preponderant to the effect that the 

information contained in respondent's memorandum to the press was false, 

misleading, and knowingly inaccurate. It establishes that the use of the names 

of the four Government officers as a reference was also false and misleading, 

that respondent knowingly delivered the memorandum to the press or caused it to 

be delivered for transmission in interstate commerce, and that the information 

in the memorandum tended to affect the price of lard in interstate commerce. 

Insufficiency of Evidence to Show Carrying of Certain Accounts to Evade 

Reporting

Referee's recommendation that there is insufficient evidence to conclude that 

the respondent carried accounts in the names of other persons in order to evade 

the reporting requirements are approved. 

Violation of Act -- Manipulation of Prices -- False Market Information

The issuance and circulation of the memorandum to the press constitutes a 

type of violation that is most serious and flagrant, for it amounts to an effort 

to manipulate prices on a commodity market and, therefore, throughout the 

country by means of false market information, and this is a case example of one 

of the principal evils against which the act was directed. 

Failures to Report as Proof of Violations of Act and Regulations thereunder

Respondent's contention that the violations perpetrated by him amount only to 

isolated and unintentional failures to report are untenable since 
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his failures to report are so numerous that it cannot be concluded that these 

are isolated instances which should be disregarded. 

Success Not Indispensable Element of Violations of Act

Success market-wise for a false, misleading or knowingly inaccurate report is 

not an indispensable element of violation. 

Inapplicability of Administrative Procedure Act in Cases of Willfulness

Where respondent was familiar with reporting requirements and his failures to 

do so were intentional, knowing or voluntary, as distinguished from accidental, 

and are therefore "willful," prior notice and opportunity for demonstrating or 

achieving compliance are not required by the Administrative Procedure Act as the 

latter Act is not applicable in cases of willfulness. 

Court Decision Distinguished 

General Foods Corporation, et al. v. Brannan, 170 F.(2d) 220, 231 (C.C.A. 7th, 

1948). 

Mr. Benj. M. Holstein for complainant. Mr. Ben Ivan Melnicoff, of Washington, 

D. C., for respondent. Mr. Jack W. Bain, Hearing Examiner. 

Decision by Thomas J. Flavin, Judicial Officer

DECISION AND ORDER

This is a disciplinary proceeding under the Commodity Exchange Act (7 U. S. 

C. Chapter 1), instituted by a complaint signed by the Acting Secretary of 

Agriculture. In general, the complaint charges the respondent, Ralph W. Moore 

of Granger, Texas, and Washington, D. C., (1) with evading the reporting 

requirements of the Commodity Exchange Act n1 and the regulations thereunder by 

failing or refusing to report contract positions, carried in his own name and in 

the names of other persons, that were required to be reported, and (2) with 

violating section 6(b) n2 and section 9 n3 of the act by preparing and 

circulating a 

document purporting to be a memorandum to the press sponsored, authorized, 

endorsed or based upon information furnished by officials of the United States 

Government, stating that the United States Government was about to undertake 

heavy lard purchases for export when such were not the facts. Respondent was 

given 20 days to answer the complaint and oral hearing was set for July 7, 1948. 

n1 "Sec. 4i. It shall be unlawful for any person to make any contract 

for the purchase or sale of any commodity for future delivery on or subject 

to the rules of any contract market unless such person shall report or 

cause to be reported to the properly designated officer in accordance with 

the rules and regulations of the Secretary of Agriculture (1) whenever such 

person shall directly or indirectly make such contracts with respect to any 

commodity, or any future of such commodity, during any one day in an amount 

equal to or in excess of such amount as shall be fixed from time to time by 

the Secretary of Agriculture; and (2) whenever such person shall directly 

or indirectly have or obtain a long or short position in any commodity or 

in any future of such commodity, equal to or in excess of such amount as 

shall be fixed from time to time by the Secretary of Agriculture . . . ." 

n2 "Sec. 6. . . . (b) If the Secretary of Agriculture has reason to 

believe that any person (other than a contract market) is violating or has 

violated any of the provisions of this Act, or any of the rules and 

regulations made pursuant to its requirements, or has manipulated or is 

attempting to manipulate the market price of any commodity, in interstate 
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commerce, or for future delivery on or subject to the rules of any board of 

trade . . . ." 

n3 "Sec. 9. Any person . . . who shall manipulate or attempt to 

manipulate the price of any commodity in interstate commerce, or for future 

delivery on or subject to the rules of any board of trade, or who shall 

knowingly or carelessly deliver or cause to be delivered for transmission 

through the mails or in interstate commerce by telegraph, telephone, 

wireless, or other means of communication false or misleading or knowingly 

inaccurate reports concerning crop or market information or conditions that 

affect or tend to affect the price of any commodity in interstate commerce, 

shall be deemed guilty of a misdemeanor, and, upon conviction thereof, be 

fined not more than $ 10,000 or imprisoned for not more than one year, or 

both, together with the costs of prosecution." 

On June 11, 1948, the proceeding was assigned to Jack W. Bain, Office of 

Hearing Examiners, as referee, who at respondent's request extended the time for 

filing an answer and postponed the hearing. Respondent filed a motion to 

dismiss the complaint for failure to state a cause of action, failure to comply 

with the Administrative Procedure Act, lack of due process, etc. Oral argument 

upon the motion was had before the referee and the motion to dismiss was denied 

by him. A subsequent motion for a bill of particulars was also denied. An 

answer was filed on October 8, 1948, denying all the allegations of the 

complaint except those dealing with failure to report respondent's contract 

positions with respect to trading accounts carried in respondent's own name. As 

to these the answer says that failure to report was unintentional and 

inadvertent. The answer also raises the defenses contained in the motion to 

dismiss. 

An advance session of the hearing was held on November 30, 1948, for the 

purpose of taking the testimony of one of complainant's witnesses who was in the 

United States temporarily and who would not be available later. Subsequent 

sessions of the hearing were held in the Department of Agriculture, Washington, 

D. C., on December 14, 15, 16, and 20, 1948, and April 26, 1949. Benjamin M. 

Holstein, Office of the Solicitor, appeared as counsel for complainant, and Ben 

Ivan Melnicoff, Washington, D. C., as counsel for respondent. At the close of 

the session of December 20, 1948, the complainant rested. Counsel for 

respondent again moved to dismiss the proceeding and the hearing was recessed to 

a later date for oral argument on the motion. On December 21, 1948, the referee 

certified the proceeding to the Secretary for the determination of certain 

questions arising in connection with the referee's ruling of August 31, 1948, 

denying respondent's motion to dismiss the complaint and exceptions to certain 

points in connection with 

such ruling filed by complainant. On February 2, 1949, the Judicial Officer 

issued a decision holding that the certification did not present any question 

that required determination at that stage of the proceeding and remanded the 

same to the referee for continuation of the hearing and for post-hearing 

procedure. In re Ralph W. Moore, 8 Agric. Dec. 146 (8 A.D. 146. On April 26, 

1949, when the hearing was resumed, leave to reopen the case on behalf of the 

complainant was requested and granted. One witness was then recalled who 

testified briefly, and complainant again rested. Counsel for the respondent 

then announced that respondent also rested and the hearing was concluded. The 

transcript of the hearing contains 574 pages. Fifty exhibits were put in 

evidence by complainant and two by respondent. Respondent's two exhibits were 

(1) a copy of a report of the President's Cabinet Committee on World Food 

Program with copies of a letter to the President by the committee and a 

statement by the President and (2) a copy of a newspaper story on the Cabinet 

Committee report. After the hearing, both parties filed suggested findings of 

fact and conclusions. 

The referee issued his report on March 10, 1950, recommending findings of 

fact and conclusions substantially as charged in the complaint except that the 
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referee concluded that in the light of General Foods Corporation et al. v. 

Brannan, 170 F. (2d) 220 (C. C. A. 7th, 1948), there was no attempt to 

manipulate the price of lard by respondent within the meaning of the act. 

Respondent filed exceptions to the report and complainant also excepted to the 

referee's conclusion that there was no violation of the act by means of an 

attempt to manipulate lard prices. Complainant also excepts to the referee's 

recommendation that respondent's trading privileges be suspended for 30 days and 

contends that a longer suspension period should be ordered. Oral argument upon 

the exceptions to the referee's report was held before me in Washington, D. C., 

on August 17, 1950. 

As indicated above, respondent offered no oral testimony at the hearing. His 

defense on the merits is, for the most part, that the complainant's case is not 

supported by the weight of the evidence. This defense of respondent and also 

other legal objections raised by him will be discussed under the heading 

"Conclusions." 

FINDINGS OF FACT

1. Ralph W. Moore, the respondent, is an individual whose business address is 

1707 N Street, N. W., Washington, D. C. 

2. At all times material herein, the Board of Trade of the City of Chicago 

(hereinafter called the Chicago Board of Trade) and 

the New York Cotton Exchange were contract markets designated under the 

Commodity Exchange Act. 

3. At all times material herein, Merrill Lynch, Pierce, Fenner & Beane 

(hereinafter called Merrill Lynch), Daniel F. Rice & Company, Gerstenberg & 

Company, Harriss & Vose, Bache and Company, and Laidlaw & Company were 

registered futures commission merchants under the act. 

4. During 1946 and through October 1947, in accounts with Daniel F. Rice & 

Company, Gerstenberg & Company, Merrill Lynch, and Harriss & Vose, respondent 

made purchases and sales for future delivery on contract markets involving 

28,000 bales of cotton, 1,095,000 bushels of wheat, 2,140,000 bushels of corn, 

3,905,000 bushels of oats, 70,000 bushels of rye, 18 carlots of eggs, and 

3,880,000 pounds of lard. 

5. On October 1, 1947, respondent was long 740,000 pounds of lard for future 

delivery on the Chicago Board of Trade, of which 100,000 pounds were for 

delivery in October 1947, 200,000 pounds in November 1947, 240,000 pounds in 

December 1947, 40,000 pounds in January 1948, and 160,000 pounds in March 1948. 

On that date respondent also had an interest in other commodity futures accounts 

carried by Laidlaw & Company and Merrill Lynch in the names of Ruth B. 

Aspinwall, Nina W. Laing, Elizabeth Anderson, James R. McDonald, Carolyn 

McIntosh, Carl Wilkens, Arline Hilyard, and Edward L. Traylor. On that date the 

net long position in lard futures in the account carried in the respondent's own 

name was 740,000 pounds and the aggregate act long position in lard futures in 

all the aforesaid accounts was 1,800,000 pounds (Government Exhibit 11). 

6. About October 1, 1947, respondent composed and had typed in his office by 

his secretary, Miss Nina Laing, at his direction, the following document, 

hereinafter called Memo to the Press: 

October 1, 1947 

MEMO TO THE PRESS: 

According to the President's September 26th statement of the estimated expert 

availabilities of edible fats and oils and peanuts approximately $ 153,900,000 

may be expended for the commodities. Of this amount lard will unquestionably 

account for the greater part of the funds to be spent. 
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Currently only $ 5,263,246 has been used in the purchase of 29,261,900 pounds 

of lard. The amount spent in the same period for other edible fats and oils is 

considerably less than one-half million dollars. 

This leaves approximately $ 147,000,000 to be expended for the purchase of 

edible fats and oils to meet the caloric requirements of persons abroad as set 

forth in the President's statement. 

Faced with this demand for lard the Department of Agriculture recently passed 

up the opportunity of acquiring a large offering of lard by purveyors at prices 

well below present levels. 

With the promises to add to the exports of fats and oils to offset what now 

appears to be a curtailed grain export program, maximum purchases of fats and 

oils, with stress on lard are expected to be made from now until April. 

Reference: Glenn Craig -- State Department 

Colonel Stanley Andrews -- U.S.D.A. 

Mr. E. J. Cronkhite -- U.S.D.A. 

Mr. George L. Prichard -- U.S.D.A. 

7. On October 1, 1947, respondent sent, by Miss Laing, two or three copies of 

the Memo to the Press to Harmer Reeside, the employee of Merrill Lynch who 

received orders from respondent for transactions in respondent's commodity 

futures accounts with Merrill Lynch, at the Washington, D. C., office of Merrill 

Lynch. 

8. In the usual course of business, upon receiving the Memo to the Press, 

Reeside took it to Herbert J. Holland, then Washington representative of the 

commodity division of Merrill Lynch, who had it teletyped to the manager of the 

lard department of Merrill Lynch in Chicago, Illinois. When Holland inquired 

and was told by George L. Prichard that Prichard knew nothing of the Memo, 

Holland wired Chicago that the authenticity of the Memo was suspected. 

9. Commodity news received is generally given wide distribution throughout 

the United States by Merrill Lynch in its regular course of business, but the 

Memo to the Press was not so distributed, the communications between Washington 

and Chicago being only inter-office communications. Respondent had received 

commodity news from Merrill Lynch in his dealings with it, and knew its practice 

of distributing such information. 

10. On October 1, 1947, respondent left from 50 to 100 copies of the Memo to 

the Press on a table at the National Press Club, Washington, D. C., on which 

table material was customarily left for any reporters who might be interested. 

The National Press Club is frequented by many news reporters in Washington, both 

members and non-members of the Club. 

11. On October 1, 1947, approximately 16 copies of the Memo to the Press were 

placed, by whom the evidence does not show, in 

boxes assigned to news reporters in the press room of the United States 

Department of Agriculture, Washington, D. C., while reporters were attending a 

press conference in another room of the building. This press room is maintained 

by the Department for the use of reporters assigned by various news services to 

"cover" the Department, and is the place where official press releases of the 

Department are made available to the reporters. Only official releases of the 

Department and releases of other national or international agencies or 

organizations having some relation to agriculture are in the usual course of 

business distributed through this press room, and all releases, official or 

otherwise, first clear through the Office of Information of the Department. The 

Memo to the Press did not clear through the Department. 
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12. On October 1, 1947, one of the copies mentioned in Finding 11 was taken 

by Raymond Maxfield Barnes from the Agriculture press room box assigned to 

Barnes, then reporter for the Chicago Journal of Commerce, a newspaper published 

in Chicago, Illinois, with circulation in various states, containing principally 

business and market news, including news of the commodity and commodity futures 

markets. In accordance with the routine of such news paper, its Washington 

office wired a description of the Memo to the Press to its Chicago office, and 

upon receiving a request from the Chicago office for more information on the 

item concerning a considerable amount of lard, the Washington office, through 

Barnes, telephoned Prichard's office but did not reach him that day. When on 

the following day Prichard advised that the Memo was not official, the newspaper 

decided not to circulate it. In the usual course of business, any news received 

by the newspaper's Washington office is wired to Chicago, and the Chicago office 

decides whether to publish it. 

13. On October 1, 1947, Ovid A. Martin, the reporter for the Associated Press 

assigned to cover the Department of Agriculture, received one of the copies 

mentioned in Finding 11 in his box in the press room. He thought it might mean 

a good news story and telephoned Prichard and Colonel Stanley Andrews, who told 

him it was unauthorized and that the indication that the Department would 

increase its lard purchases was untrue. In the usual course of business, when 

Martin receives a release containing information he thinks might lead to a news 

story, he checks for any unanswered questions and sends the story in to the 

Associated Press, where it is decided whether the story is to be used. If the 

decision is to use it, the story is distributed to some 2,000 newspapers in all 

of the 48 States. Martin did not prepare, and the Associated 

Press did not distribute, a story based upon the Memo to the Press. Martin was 

not a member of the National Press Club but had received, from the table there, 

releases upon which he had based stories distributed by the Associated Press. 

14. The Memo to the Press did not contain the heading usually appearing on 

Department press releases, and was on paper of a different size from that used 

for Department releases. Department releases do not usually contain the names 

of persons as references. The Memo did not appear to be a Department release to 

the Department employees and the news reporters who testified to having seen it. 

15. None of the persons named as references in the Memo to the Press had 

authorized use of his name, none of them furnished any information on lard 

purchases to respondent, and none of them had any knowledge of the Memo until 

after it had been distributed. 

16. The purchase of the large quantities of lard indicated in the Memo to the 

Press was not contemplated on or around October 1, 1947, and the indication of 

such purchase was knowingly inaccurate, untrue and misleading. 

17. There is trading in lard for future delivery on the Chicago Board of 

Trade, but not on any other contract market. The price of lard futures on the 

Chicago Board of Trade is directly related to the market price of lard at 

Chicago and throughout the United States, and a change in the futures price is 

reflected in the market price. 

18. Publication of news that purchases of lard would be made as indicated in 

the Memo to the Press would have caused increases in the price of lard futures 

on the Chicago Board of Trade, and in the market price of lard in Chicago and 

throughout the United States. 

19. In October 1947, in discussing the Memo to the Press, respondent told 

employees of the Department that although the price of hogs had gone up, the 

price of lard had gone down, and he complained that procurement policies of the 

Department had kept the lard price too low. 

20. Respondent thought the price of lard was too low and he issued the Memo 

to the Press in trying to raise it toward what he considered a proper level. By 

virtue of his long position in lard futures in his own name and the long 
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positions in lard futures in accounts in which he had an interest shown in 

Finding 5, respondent would have profited by an increase in price. 

21. Section 4i of the Commodity Exchange Act requires a person to report to 

the Secretary's designee whenever such person's 

daily trading, or long or short open contract position, in any future equals or 

exceeds such amount as the Secretary may specify. Regulations have been 

promulgated setting forth the details of this requirement. Under these 

regulations, a trader reaches reporting status whenever he owns or controls a 

long or a short open contract position in any one future of the commodity in 

question on any one contract market equal to or in excess of the amount fixed by 

the Secretary of Agriculture for that commodity. The trader then becomes 

obligated to report, for that particular day, all transactions and positions in 

all futures of such commodity on all contract markets, in all accounts which he 

owns or controls, and to file similar reports for any succeeding day when such 

accounts have transactions in that commodity, so long as he remains in reporting 

status. A final report is required on the day when the trader falls below 

reporting status. The amount fixed in the regulations for reporting purposes 

for lard is 250,000 pounds (17 CFR 9.21), for wheat and oats, 200,000 bushels 

(17 CFR 2.21), and for cotton 5,000 bales (17 CFR 3.21). The regulations 

require every person who "holds or controls" the applicable amounts to report 

(17 CFR 2.10, 3.10, 9.10) and one who directs trading for an account is deemed 

to control the account (17 CFR 1.3 (j)). 

22. On October 3, 1947, through Merrill Lynch, respondent bought 100,000 

pounds of lard for future delivery in November 1947, which added to 150,000 

pounds previously bought by him in the November future, gave him a position of 

250,000 pounds long in that future. He maintained such position until October 

14, 1947, on which day he reduced such position to 200,000 pounds long by a sale 

of 50,000 pounds. In addition to the October 3 purchase and the October 14 sale 

mentioned, respondent made the following transactions in Chicago lard futures in 

October 1947: sold 40,000 pounds, March, on October 3; sold 40,000 pounds, 

December, and 40,000 pounds, March, on October 4; sold 40,000 pounds, December, 

and 40,000 pounds, March, on October 6; bought 40,000 pounds, December, on 

October 8; bought 80,000 pounds, March, on October 9; and sold 40,000 pounds, 

March, and 40,000 pounds, December, on October 14, making 11 lard futures 

transactions on six different days during the period October 3 through October 

14, 1947. Respondent filed no reports for this period with the Commodity 

Exchange Authority. 

23. Respondent told Harmer Reeside, by whom respondent's orders were taken at 

Merrill Lynch, that respondent did not want to be in reporting status. 

Respondent was told by Reeside that his position mentioned in Finding 22 

contained one too many contracts, 

and respondent instructed Reeside to liquidate that contract. 

24. On October 10, 1947, the Chicago office of the Commodity Exchange 

Authority wrote respondent that he was in reporting status for lard, and asking 

him to report. Respondent answered by letter on October 22, followed by another 

on October 24, 1947, stating that, as to lard, "I am sure that I have never 

owned 250,000 pounds or more in any one option." He said he would be glad to 

furnish further information if called on. 

25. On August 21, 1947, through Gerstenberg & Company, respondent bought 

25,000 bushels of wheat on the Chicago Board of Trade for future delivery in 

December 1947, which added to the 185,000 bushels previously bought by him in 

that future, gave him a position therein of 210,000 bushels long. He maintained 

such position until September 2, 1947, on which day he reduced it to 185,000 

bushels long by a sale of 25,000 bushels. In addition to the August 21 purchase 

and the September 2 sale mentioned, respondent made the following transactions 
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in Chicago wheat futures: August 23, 1947, sold 15,000 bushels, September 

delivery; August 26, 1947, bought 10,000 bushels, May delivery; August 27, 1947, 

sold 95,000 bushels, May delivery, and bought 90,000 bushels, September 

delivery; and September 29, 1947, sold 10,000 bushels, May delivery, making 

seven wheat futures transactions on six different days during the period August 

21 through September 2, 1947. Respondent filed no reports for this period with 

the Commodity Exchange Authority. 

26. On February 9, 1948, through Gerstenberg & Company, respondent sold 

100,000 bushels of wheat for future delivery in September on the Chicago Board 

of Trade, which gave him a position of 210,000 bushels short in the September 

future, when added to the 110,000 bushels he had previously sold in that future 

through Daniel F. Rice & Company. Respondent held this position through 

February 11, 1948. In addition to the sale mentioned, respondent bought 100,000 

bushels of the May wheat future on February 9, 1948, sold 10,000 of the May on 

the same day, bought 100,000 of the July on February 10, 1948, sold 100,000 of 

the May on the same day, and bought 10,000 May on February 11, 1948. Respondent 

filed no reports for this period with the Commodity Exchange Authority. 

27. On August 22, 1947, respondent bought 15,000 bushels of oats for future 

delivery in December on the Chicago Board of Trade, which purchase gave him a 

long position of 200,000 bushels in that future. On the following day 

respondent bought 10,000 

 

bushels and sold 20,000 bushels in that future, leaving his position therein 

190,000 bushels long. In addition to the three transactions mentioned, on these 

two days respondent bought 90,000 bushels of oats for delivery in May and sold 

20,000 for delivery in September. He filed no reports for this period with the 

Commodity Exchange Authority. 

28. From July 31, 1947, to August 22, 1947, the respondent was the owner of 

commodity futures accounts carried in his own name on the books of Daniel F. 

Rice & Company, Gerstenberg & Company, and Merrill Lynch, and also had an 

interest in and controlled and directed trading in the commodity futures account 

of Elizabeth Anderson carried on the books of Merrill Lynch. On July 31, 1947, 

as the result of a purchase of September oats futures contracts executed on the 

Chicago Board of Trade by Gerstenberg & Company for the respondent's account, 

the aggregate net long position in September oats futures contracts on the 

Chicago Board of Trade in the accounts of respondent and Elizabeth Anderson 

reached 200,000 bushels and remained at 200,000 bushels continuously until 

August 4, 1947. On August 1, August 2, and August 4, 1947, on which dates the 

respondent was in reporting status by reason of his position in September oats, 

purchases and sales of September and December oats futures contracts were 

executed on the Chicago Board of Trade by Daniel F. Rice & Company and Merrill 

Lynch for the accounts of the respondent and Elizabeth Anderson, and on August 

4, 1947, the aggregate net long position in September oats futures contracts on 

the Chicago Board of Trade in such accounts was reduced to 170,000 bushels. On 

August 20, 1947, as the result of a purchase of December oats futures contracts 

executed on the Chicago Board of Trade by Daniel F. Rice & Company for 

respondent's account, the aggregate net long position in December oats futures 

contracts on the Chicago Board of Trade in the accounts of the respondent and 

Elizabeth Anderson reached 205,000 bushels. The respondent filed no reports for 

this period with the Commodity Exchange Authority. 

29. (a) From July 11, 1947, through October 18, 1947, the respondent was the 

owner of a commodity futures account carried in his own name on the books of 

Merrill Lynch and also had an interest in and controlled and directed trading in 

the commodity futures accounts of Lois Moore, Elizabeth Anderson, William J. 

Goodwin, James E. McDonald, Ruth B. Aspinwall, and Glenn Blackshear, carried on 

the books of Laidlaw & Company and Merrill Lynch. 

(b) During the period from July 11 through October 18, 1947, 

 
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the respondent, because of purchases and sales of lard futures executed upon the 

Chicago Board of Trade by Merrill Lynch for the accounts of respondent and 

Elizabeth Anderson, was in a reporting status with respect to the combined 

accounts of all the persons named in Finding 29(a) upon approximately 90 days 

covering approximately 122 reportable items. He filed no reports for this 

period with the Commodity Exchange Authority. 

30. On December 18, 1947, the respondent had a commodity futures account in 

his own name and had an interest in and controlled and directed trading in the 

commodity futures account of Lois Moore, his wife. These accounts were carried 

by Harriss & Vose. On this date, as the result of sales of December cotton 

futures contracts exceuted on the New York Cotton Exchange by Harriss & Vose for 

the respondent's account and for the account in the name of his wife, the 

aggregate net short position in December cotton futures contracts on the New 

York Cotton Exchange in the accounts of respondent and his wife reached 7,400 

bales, by reason of which the respondent became subject to the requirement that 

he report to the Commodity Exchange Authority with respect to the open contracts 

in all cotton futures in his own account and in the account of his wife to the 

extent of his interest in or control of such accounts. He filed no reports with 

the Commodity Exchange Authority. 

31. Respondent financed in whole or in part the accounts in names other than 

his own that are mentioned in Findings 5, 28, 29 and 30. He obtained no 

collateral or other security and many of the accounts were in the names of 

persons who could not give security and who were inexperienced in commodity 

trading. Most of the accounts were opened by respondent with deposits of cash, 

transfer of credit or checks issued by Lois Moore, respondent's wife. Trading 

orders were given by the respondent and accepted by the brokers although the 

brokers had on file no powers of attorney to respondent from the persons in 

whose names the accounts were carried. The accounts carried respondent's 

address. Checks constituting payments out of the accounts were delivered to the 

respondent and were endorsed by him as well as by the payee. The reasons 

respondent gave for his acts to investigators for the complainant were that 

these people were either friends of his or friends of his friends, and he wanted 

to help them make some money. In practically every instance the accounts showed 

a profit. He also told the investigators that he gave the profits to the 

persons in whose names the accounts were carried and that he merely got his 

money back. There were transfers of funds from 

 

various accounts to others, and many from respondent's accounts to these 

accounts including deposits in these accounts of checks issued in the name of 

Lois Moore, respondent's wife. 

CONCLUSIONS

I

The facts concerning the preparation, issuance and circulation of the Memo to 

the Press, covered by Findings 6 through 15, are either admitted or established 

by records and testimony neither impeached nor contradicted. Indeed the 

respondent admitted to the complainant's investigators that he composed and 

issued the Memo. 

Respondent defends, however, by arguing that no violation of the act 

occurred. Complainant charges that respondent violated section 6(b) and two 

separate parts of section 9 n4 of the act by his activities in connection with 

the Memo, (1) the provisions dealing with the delivery for transmission in 

interstate commerce of false or misleading or knowingly inaccurate reports on 

conditions that affect or tend to affect the price of a commodity in interstate 

commerce, and (2) the provisions prohibiting manipulation or attempts to 

manipulate the price of any commodity in interstate commerce or for future 

delivery on or subject to the rules of any board of trade. 
Page 10 

n4 Section 6(b) of the act under which this proceeding is brought 

provides in part: "If the Secretary of Agriculture has reason to believe 

that any person (other than a contract market) is violating or has violated 

any of the provisions of this Act, or any of the rules and regulations made 

pursuant to its requirements, or has manipulated or is attempting to 

manipulate the market price of any commodity, in interstate commerce, or 

for future delivery on or subject to the rules of any board of trade. * * * 

." 

Respondent insists that the information contained in the Memo to the Press 

was true and that the evidence shows that the Memo misled no one. Considering 

first the question of a violation of the provisions covering false, misleading 

or knowingly inaccurate reports on conditions that affect or tend to affect the 

price of a commodity in interstate commerce, the evidence is more than 

preponderant to the effect that the Memo was false, misleading and knowingly 

inaccurate. The Department of Agriculture was faced with no demand for lard, 

there was no intention, commitment or program to expend $ 153,900,000 on fats, 

oils and peanuts with the greater part of $ 153,900,000 to be spent on lard 

procurement and there was to be no stress on lard in procuring edible fats and 

oils. In fact, the emphasis was upon peanuts in the purchasing operations of 

the Department. Neither the President's statement nor the report of the Cabinet 

Committee even so much 

 

as mentions the word "lard." There was no stress or emphasis upon lard 

procurement publicly announced or generally known and the respondent did not get 

any such information privately from the appropriate Government officials. On 

the contrary, the Memo and respondent's admissions to the investigators show 

that respondent was aggrieved because there wasn't any such stress or emphasis.

He thought the Department's procurement policy on lard had kept lard prices from 

advancing as respondent wished. 

The use of the names of the four Government officials as "References" was 

also false and misleading. None of these officials sponsored or endorsed the 

Memo, none supplied the information, and the information was false. The obvious 

purpose of placing their names upon the Memo was to give an appearance of 

reliability and authenticity. It is no valid escape for respondent to point out 

that the purpose of the Memo failed because of the discovery of its falsity 

before widespread publication. Success market wise for a false, misleading or 

knowingly inaccurate report is not an indispensable element of the violation. 

The evidence also clearly establishes that respondent knowingly delivered the 

Memo to the Press or caused it to be delivered for transmission in interstate 

commerce. The information was wired from Washington, D. C., to Chicago, 

Illinois, by Merrill Lynch, the delivery to the Press Club was for news service 

representatives and newspaper reporters to forward the information to their 

newspapers throughout the country, and the deliveries at both Merrill Lynch and 

the National Press Club were in interstate commerce because the deliveries were 

made within the District of Columbia which, in itself, is interstate commerce as 

defined by section 2 (a) of the act. There is ample evidence in the record, 

too, that the information in the Memo tended to affect the price of lard in 

interstate commerce. Therefore, respondent's efforts to escape establishment of 

a violation of these provisions of section 9 must fail. 

The referee concluded, however, that there was no attempt to manipulate the 

price of lard in violation of section 6(b) and other provisions of section 9, 

basing his opinion upon the decision in General Foods Corporation et al. v. 

Brannan, 170 F. (2d) 220, 231 (C. C. A. 7th, 1948), where the court held that 

taking two million bushels of so-called "distress" rye out of the open market to 

keep rye prices from declining was not an attempt to manipulate the price of rye 

within the meaning of the act. 

In this case, the evidence is beyond dispute that the respondent issued the 

Memo for the purpose of raising lard prices. The respondent 
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did not testify and no other credible motivation is advanced on behalf of the 

respondent even in argument. Why the respondent wanted lard prices to go up is 

clearly demonstrated by the large long position in the trading account in his 

own name and the long positions in the accounts in which he had an interest. 

The respondent not only knowingly and willfully endeavored to bring about an 

artificial price but he knowingly and willfully used false and misleading 

information to do so. We believe that this is a clear-cut instance of an 

attempt to manipulate in violation of section 6(b) and section 9 of the act and 

is not governed by the decision of the Circuit Court of Appeals in the General 

Foods case. 

II

The respondent failed to report positions and transactions in accounts under 

his own name. Such failure was a violation of section 4i of the act and 

sections 2.10, 2.11, 2.21, 9.10, 9.11 and 9.21 of the rules and regulations. 

Findings 23 and 24 show that the respondent knew of the reporting requirements 

and that he did not wish to report. He argues that the violations amount only 

to isolated and unintentional failures to report but his failures to report are 

so numerous that we cannot conclude that these are isolated instances which 

should be disregarded. Respondent also invokes Section 9(b) of the 

Administrative Procedure Act, n5 5 U. S. C. § 1001 et seq. The respondent was 

given an opportunity to report his lard position and transactions (Finding 24) 

but failed to do so. In any event, he was familiar with reporting requirements 

and his failures must be regarded as intentional, knowing or voluntary, as 

distinguished from accidental, and are therefore "willful." Prior notice and 

opportunity for demonstrating or achieving compliance are not required by 

Section 9(b) of the Administrative Procedure Act in cases of "willfulness." 

n5 "Except in cases of willfulness or those in which public health, 

interest, or safety requires otherwise, no withdrawal, suspension, 

revocation, or annulment of any license shall be lawful unless, prior to 

the institution of agency proceedings therefor, facts or conduct which may 

warrant such action shall have been called to the attention of the licensee 

by the agency in writing and the licensee shall have been accorded 

opportunity to demonstrate or achieve compliance with all lawful 

requirements." 

We reach the conclusion also that the respondent violated the act and the 

regulations by failing to report the transactions and positions, described in 

Findings 28, 29 and 30, resulting from combining accounts in his own name with 

accounts in the names of other persons but controlled by the respondent. 

The respondent claims that the evidence is not sufficient to conclude that 

the respondent "controlled" these latter accounts. Of 

 

course neither the respondent nor any of the persons named appeared as witnesses 

at the hearing to throw any light upon the situation so that we have only the 

evidence introduced by the complainant to consider. This evidence, as described 

in Finding 31, is that the respondent had aggregate deposits of about $ 30,000 

in the Elizabeth Anderson account without collateral or security and that he 

opened the Goodwin, McDonald, Aspinwall and Black-shear accounts by transfers of 

credit, deposits of cash or by checks issued in the name of Lois Moore, his 

wife. There are many instances in the record involving other accounts where 

checks issued by or to Lois Moore were used by the respondent in his trading 

operations. In the accounts named, the respondent gave the trading orders to 

the brokers although on some occasions the respondent's associate, Nina Laing, 

gave orders in the Anderson account. Although the persons in whose names the 

accounts were carried gave no powers of attorney to the brokers, the brokers 

accepted the respondent's orders without question. 
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These factors and other facts outlined in Finding 31 make up a pattern of 

control by respondent over the named accounts. The technical fact that legally 

the named persons could withdraw funds from the accounts does not negative 

control. They did not do so except for one relatively small item in the 

Anderson account. Accordingly, we conclude that the respondent was in violation 

of section 4i of the act and sections 2.10, 2.11, 2.21, 3.10, 3.11, 3.21, 9.10, 

9.11, and 9.21 of the rules and regulations. For the reasons given above with 

respect to accounts in the respondent's own name, Section 9(b) of the 

Administrative Procedure Act is of no avail to respondent in connection with the 

failures to report involving the controlled accounts. 

III

We agree with the referee in his recommendation that there is insufficient 

evidence to conclude that the respondent carried accounts in the names of other 

persons in order to evade the reporting requirements. We have also refrained 

from making any findings as to the respondent's part ownership of the Farm 

Products Company. 

Farm Products Company comes into the case by virtue of a 1947 Harriss & Vose 

account designated "Dyke Cullum, account Farm Products Company." The complaint 

alleged and the referee found that the respondent was part owner of this company 

and that, therefore, the respondent should have reported the trading of the 

 

company when, as found in Finding 30, the combined accounts of the respondent 

and his wife reached reporting status with respect to cotton. The evidence as 

the hearing discloses that in 1946 Merrill Lynch and Rache & Company had 

accounts in the name of Farm Products Company which were opened by Dyke Cullum 

and by the respondent as partners. However, no such partnership or joint 

account agreement was executed in connection with the Harriss & Vose account. 

After the referee's report was issued, a letter was received from Dyke Cullum 

stating that the respondent withdrew from Farm Products Company before it made 

any trades on any commodity exchange. 

Since the respondent was in reporting status with respect to his own account 

and his wife's at any rate, the matter of the respondent's duty to report the 

trading in the 1947 Harriss & Vose account of "Dyke Cullum, account Farm 

Products Company" is dropped in view of the question raised as to the 

respondent's interest in the account. 

IV

To the extent that this decision and order are inconsistent with findings and 

conclusions suggested by the respondent, or motions, objections and exceptions 

not specifically discussed herein, of course such findings, conclusions, 

motions, suggestions, objections, exceptions, etc., are denied. 

The question remains as to what sanction should be ordered. The failures to 

report are much the lesser of the violations found. The issuance and 

circulation of the Memo to the Press constitutes a type of violation that is 

most serious and flagrant, namely, an effort to manipulate prices on a commodity 

market and, therefore, throughout the country by means of false market 

information. This is a case example of one of the principal evils against which 

the act was directed. It is our opinion that the respondent's trading 

privileges should be suspended for a period of 90 days. 

ORDER

Commencing on January 1, 1951, all contract markets shall refuse to Ralph W. 

Moore the privileges of trading thereon, either directly or indirectly, for a 

period of 90 days. 

Copies hereof shall be served upon the parties by registered mail or in 

person and upon each contract market. 
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