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Commodity Futures Trading Commission 

CEA CASES 

NAME: SECRETARY OF AGRICULTURE V. HENRY C. GATLIN 

DOCKET NUMBER: 32 

DATE: MAY 5, 1942 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

AGRICULTURAL MARKETING ADMINISTRATION 

COMMODITY EXCHANGE BRANCH 

WASHINGTON, D. C. 

UNITED STATES OF AMERICA 

BEFORE THE SECRETARY OF AGRICULTURE 

CE-A Docket No. 32 

Secretary of Agriculture, Complainant v. Henry C. Gatlin, Respondent 

Complaint and Notice of Hearing 

There being reason to believe that the respondent has violated the Commodity 

Exchange Act (7 U.S.C. 1940 ed. 1) and the rules and regulations promulgated 

pursuant thereto, this complaint is issued alleging the following: 

1. 

Henry C. Gatlin (hereinafter referred to as the respondent) is an individual 

doing business as a floor broker at Chicago, Illinois. 

2. 

During the year 1941, the respondent was a member of the Chicago Mercantile 

Exchange, a contract market designated as such by the Secretary of Agriculture 

under the Commodity Exchange Act. 

3. 

During 1941, and up to the present time, the respondent has engaged as a 

floor broker on the Chicago Mercantile Exchange and has been registered as a 

floor broker with the Secretary of Agriculture under the Commodity Exchange Act 

since September 4, 1941. 

4. 

The respondent, during the calendar year 1941, while engaged as a floor 

broker in executing orders for the purchase or sale of potatoes, eggs, and 

butter for future delivery, on and subject to the rules of the Chicago 

Mercantile Exchange, for and on behalf of 

various clearing members, including Dauber Brothers, J. S. Bache and Company, 

Harris Upham and Company, and L. D. Schreiber and Company, did, without the 

prior consent of the customer for whom he was executing these orders, become the 

purchaser for his own account with respect to selling orders and the seller for 

his own account with respect to buying orders. Included among the trades which 

were so handled were the trades set forth on the two tabulations attached hereto 

and made a part hereof as Exhibits A and B. 
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5. 

The contracts for the future delivery of potatoes, eggs, and butter, referred 

to in paragraph 4, could be used for hedging transactions in these commodities 

in interstate commerce. 

6. 

The respondent, by reason of the facts alleged in the preceding paragraphs, 

did willfully and knowingly, without the prior consent of his customers, become 

the buyer in respect to selling orders of such customers and the seller in 

respect to buying orders of such customers relative to contracts for the future 

delivery of commodities made on and subject to the rules of a contract market, 

all in violation of Section 4b(D) of the Commodity Exchange Act. 

THEREFORE, the respondent is hereby afforded an opportunity to answer the 

foregoing allegations in accordance with the rules of practice and is notified 

to be and appear before a referee to be appointed by the Secretary of 

Agriculture at a hearing to be held at 10 a.m. on May 28, 1942, at Room 1200, 

Board of Trade Building, 141 West Jackson Boulevard, Chicago, Illinois, or at 

such other times and places as may be determined by the referee, and then and 

there show cause, if any there be, why an order should not be made suspending or 

revoking the registration of the respondent as a floor broker and directing that 

all contract markets, until further notice by the Secretary of Agriculture, 

refuse all trading privileges to the respondent. 

IT IS ORDERED that the complaint and notice of hearing be served upon the 

named respondent by delivery of a true copy hereof to him by an employee of the 

Department of Agriculture, or by registered mail, at least three days prior to 

the date herein set for hearing. 

(SEAL) 

Done at Washington, D. C., this 5th day of May 1942. Witness my hand and the 

seal of the Department of Agriculture. 

/s/ Thomas J. Flavin 

Assistant to the Secretary of Agriculture 

DEPARTMENT OF AGRICULTURE 

WASHINGTON 

BEFORE THE SECRETARY OF AGRICULTURE 

Secretary of Agriculture, Complainant v. Henry C. Gatlin, Respondent 

CE-A Docket No. 32 

Proceedings, Findings of Fact, Conclusions, and Order 

PROCEEDINGS 

On May 5, 1942, a complaint was issued by Thomas J. Flavin, Assistant to the 

Secretary of Agriculture, pursuant to the Commodity Exchange Act, as amended (7 

U.S.C. 1940 ed. 1 et seq.), against Henry C. Gatlin, Chicago, Illinois, the 

respondent. 

The complaint alleged that Henry C. Gatlin, during the year 1941, was a 

member of the Chicago Mercantile Exchange, a contract market designated as such 

by the Secretary of Agriculture under the Commodity Exchange Act. While engaged 

in business as a floor broker and registered as such with the Secretary of 

Agriculture, the respondent, in executing orders for the purchase or sale of 

potatoes, eggs, and butter for future delivery on and subject to the rules of 

the Chicago Mercantile Exchange for and on behalf of various clearing members, 

without the prior consent of the customer for whom he was executing these 

orders, became the purchaser for his own account with respect to selling orders 

and the seller for his own account with respect to buying orders. 
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A hearing was set for May 28, 1942, in Chicago. Prior to the date set for 

hearing, Henry C. Gatlin, the respondent, executed a document entitled 

"Admission of Facts, Waiver of Hearing and Consent to Order" in which he 

acknowledged receipt of a copy of the complaint in this proceeding, admitted the 

allegations contained therein, waived a hearing on the complaint, and consented 

to the entry, without further notice to him, of an order by the Secretary of 

Agriculture, based upon the facts alleged in the complaint and admitted by the 

respondent, together with the facts stated in a statement signed by the 

respondent on April 23, 1942. 

FINDINGS OF FACT 

1. Henry C. Gatlin is an individual who, during the year 1941, was engaged in 

business as a floor broker at Chicago, Illinois, and is at present so engaged 

and has been registered with the Secretary of Agriculture as a floor broker 

under the provisions of the Commodity Exchange Act since September 4, 1941. 

2. During the year 1941, the respondent was a member of the Chicago 

Mercantile Exchange, a contract market designated as such by the Secretary of 

Agriculture under the Commodity Exchange Act. 

3. The respondent, during the calendar year 1941, while engaged as a floor 

broker in executing orders for the purchase or sale of potatoes, 

eggs, and butter for future delivery on and subject to the rules of the Chicago 

Mercantile Exchange for and on behalf of various clearing members, did, without 

the prior consent of the customer for whom he was executing these orders, become 

the purchaser for his own account with respect to selling orders and the seller 

for his own account with respect to buying orders. 

4. The contracts for future delivery of potatoes, eggs, and butter, referred 

to in paragraph 3, could be used for hedging transactions in these commodities 

in interstate commerce. 

CONCLUSIONS 

Based upon the foregoing facts, it is concluded that the respondent did 

wilfully and knowingly and without the prior consent of his customers became the 

buyer in respect to selling orders of such customers and the seller in respect 

to the buying orders of such customers relative to contracts for the future 

delivery of commodities made on and subject to the rules of a contract market, 

all in violation of section 4b (D) of the Commodity Exchange Act. These 

violations' by the respondent in and of themselves would warrant the denial of 

trading privileges on contract markets and suspension of his registration as a 

floor broker under the Commodity Exchange Act. However, in view of the lack of 

evidence of a fraudulent intent and mitigating circumstances set forth in the 

statement of April 23, 1942, including the manner of conducting trading on the 

exchange and the general practice existing prior to January 1942, it is 

concluded that the respondent's registration as a floor broker under the 

provisions of the Commodity Exchange Act should be suspended for a period of 

thirty days. 

ORDER 

IT IS ORDERED that the registration of Henry C. Gatlin as a floor broker be, 

and the same hereby is, suspended for a period of thirty days. 

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 on the 10th day of July, 1942. 

(SEAL) 

Done at Washington, D. C., this 25th day of June, 1942. Witness my hand and 

the seal of the Department of Agriculture. 

(S) Thomas J. Flavin 
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Assistant to the Secretary of Agriculture 

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