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Commodity Futures Trading Commission 

CEA CASES 

NAME: SECRETARY OF AGRICULTURE V. WALTER T. RICE 

DOCKET NUMBER: 28 

DATE: MAY 31, 1941 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES OF AMERICA 

BEFORE THE SECRETARY OF AGRICULTURE 

CE-A Docket No. 28 

Secretary of Agriculture, Complainant, v. Walter T. Rice, Respondent. 

Complaint and Notice of Hearing under Section 6(b) of the Commodity Exchange 

Act. 

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

Exchange Act (7 U. S. C. and Supp. V, §§ 1-17a), and the rules and regulations 

promulgated pursuant thereto, this complaint is issued alleging the following: 

1. 

Walter T. Rice, the respondent, during the period from October 1, 1939, to 

January 31, 1940, on various dates, including on or about October 31, November 

10, and December 15, 1939, and January 16, 25, and 25, 1940, offered to enter 

into, and entered into, transactions at Chicago, Illinois, involving grains, 

which were, or could be, used for hedging any transaction in interstate commerce 

in such commodities, or the products or by-products 

thereof, or determining the price basis of any such transactions in interstate 

commerce, in such commodities, or for delivering such commodities sold, shipped, 

or received, in interstate commerce, for the fulfillment thereof, which 

transactions were of the character of and commonly known as "privileges", 

"bids", or "offers". Such transactions were entered into by the respondent with 

W. A. Anderson and Moses Eisemann, and, in a number of instances, resulted in 

transactions in grain futures contracts on the Board of Trade of the City of 

Chicago, all in violation of Section 4c(B) of the Commodity Exchange Act. 

2. 

During the period from October 1, 1939, to the present time, I. P. Skolly has 

been a member of the Board of Trade of the City of Chicago, a contract market 

designated by the Secretary of Agriculture under the Commodity Exchange Act, 

and, during this period, has been registered with the Secretary of Agriculture 

as a futures commission merchant. 

3. 

During the period between October 1, 1939, and January 31, 1940, Walter T. 

Rice had an account with I. P. Skolly, acting as futures commission merchant, 

and caused transactions in contracts 

for the future delivery of grains, on the Board of Trade of the City of Chicago, 

to be executed by or through I. P. Skolly. for the account of Walter T. Rice, 

this account being carried on the books of I. P. Skolly under the designation, 

"Account No. 100". 
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4. 

Walter T. Rice, during March and April 1940, engaged in a conspiracy with Ed 

Sproules, an employee of I. P. Skolly, I. P. Skolly and others, to conceal the 

identity of the parties to the contracts for the future delivery of grain, which 

were made upon or subject to the rules of the Board of Trade of the City of 

Chicago, as alleged in paragraph 3, and to cause I. P. Skolly to give false 

information to an authorized representative of the Commodity Exchange 

Administration with respect to the transactions made by I. P. Skolly for the 

account of Walter T. Rice, and carried on the books of I. P. Skolly under the 

designation, "Account No. 100", all in violation of Sections 4 and 4b(B) of the 

Commodity Exchange Act, and Section 1.35 of the Rules and Regulations 

promulgated by the Secretary of Agriculture under said act. 

THEREFORE, the respondent is hereby notified, unless a hearing is waived, to 

be and appear before a referee appointed by the Secretary of Agriculture at a 

hearing to be held at 10 a.m. 

on June 17, 1941, in the offices of the Commodity Exchange Administration, Board 

of Trade Building, 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 directing that all contract markets, until 

further notice of the Secretary of Agriculture, refuse all trading privileges to 

the respondent. 

IT IS ORDERED that the respondent shall, within fifteen days after receipt of 

this complaint, file an answer with the hearing clerk, Office of the Solicitor, 

Department of Agriculture, Washington, D. C., as follows: 

(a) If the respondent desires to contest the proceeding, the answer shall 

contain a statement of the facts which constitute the ground of defense and 

shall admit, deny, or explain each of the facts alleged in the complaint, unless 

the respondent is without knowledge as to any alleged fact, in which case the 

answer shall so state. 

(b) If the respondent desires to waive hearing on the charges set forth in 

the complaint and not to contest the proceeding, the answer may consist of a 

statement that the respondent admits all the material allegations 

of the complaint to be true, and such answer shall be deemed to waive a hearing 

thereon and to authorize the Secretary of Agriculture, without hearing and 

without further evidence or other intervening procedure, to issue an order 

directing that all contract markets refuse all trading privileges to the 

respondent for such time as may be fixed by the order. 

(c) If the respondent desires to waive hearing on the charges set forth in 

the complaint, but desires to contest the proceeding on the ground that the 

facts alleged do not constitute a violation of the Commodity Exchange Act, or do 

not warrant disciplinary action by the Secretary of Agriculture, the answer may 

consist of a statement that the respondent admits all the material allegations 

of the complaint to be true and that he waives hearing, but desires to be given 

an opportunity to submit argument in support of his contention. In such case, 

the respondent shall be served with a tentative order containing findings of 

fact, conclusion, and order, to which he shall be given an opportunity to file 

exceptions and briefs in support thereof, and, upon request, to make oral 

argument. 

Failure of the respondent to file an answer within the time above provided, 

and failure to appear at the time and place fixed for hearing, shall be deemed 

to authorize, without further hearing, notice to the respondent or other formal 

procedure, the admission and consideration, as part of the record, of reports of 
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employees of the Department of Agriculture and other documents upon which the 

complaint is based, and the issuance of an order based on such record. 

IT IS FURTHER ORDERED that this complaint and notice of hearing be served on 

the named respondent by delivery of a true and correct copy hereof to the 

respondent, by an employee of the Department of Agriculture or by registered 

mail. 

Done at Washington, D. C., this 31st day of May, 1941. Witness my hand and 

the seal of the Department of Agriculture. 

/s/ Grover B. Hill 

Assistant Secretary of Agriculture. 

(SEAL) 

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